The holy grail for many smaller companies is to be acquired by a larger organization. If that was the wish of San Jose, California-based EnergyConnect Group, Inc., today was its lucky day. The provider of smart grid demand response services announced this morning that it has signed a definitive merger agreement with Johnson Controls, Inc. (NYSE:JCI), an industry leader in delivering products, services and solutions that increase energy efficiency, for a cash payment of approximately $32.3 million.
Per the agreement, Johnson Controls will purchase all of the outstanding shares of ECNG at the price of $0.2253 per share; representing a nearly 73% increase from the closing price on March 2, 2011. The merger price reflects near one-year highs for the stock price as it touched $0.26 in April of 2010, but the reaction of shareholders that have been holding since before late 2008 may not be as rosy since the cost of a share of ECNG before that time was significantly higher.
The Board of Directors of Energy Connect has already approved the merger, but the shareholders of EnergyConnect still have a vote for the transaction in a proxy which is expected to be filed in one month, for which the Board obviously encourages the ECNG shareholders to vote in favor of the merger. If all goes as expected and customary conditions are met, the deal is anticipated to be finalized this summer.
Commenting on the merger arrangement, Kevin R. Evans, President and CEO of EnergyConnect, stated, “The terms of the merger agreement represent a great outcome for our shareholders,” and “Combining forces with Johnson Controls’ extensive market reach would enable us to provide complete end-to-end demand response solutions to a significantly expanded customer base.”
Those interested can learn more about EnergyConnect Group on the Company’s website at www.energyconnectinc.com and more about Johnson Controls, Inc. at www.johnsoncontrols.com