New Energy Systems Group, a manufacturer and distributor of battery components in China, recently announced that the company has entered into an agreement to acquire Shenzhen NewPower Technology Co., Ltd. for $14.7 million in cash and stock. The transaction, comprised of $3 million in cash and 1.8 million shares of New Energy’s common stock with a value of $11.7 million at $6.42 per share, is set to be completed by the end of 2009.

Founded in 2004, Shenzhen NewPower Technology Co. is a rapidly growing manufacturer of lithium ion batteries. The company expects to generate revenue of approximately $20.1 million in 2009 and $27.4 million in 2010. Additionally, NewPower expects to report net income of $1.5 million in 2009. This acquisition increases the profitability of New Energy’s existing battery distribution business and enhances the company’s position as a vertically integrated manufacturer.

Mr. Fushun Li, New Energy’s chief executive officer, stated, “We have known NewPower’s management for many years and are excited to have them join our organization in what we expect to be a seamless integration.” Mr. Li added, “We are also pleased by NewPower’s desire to take most of their consideration in the form of New Energy common stock, which reflects their confidence in New Energy’s future prospects.”

Further commenting on the acquisition, Mr. Li continued, “We are also excited about the opportunity to expand NewPower through cross-selling and leveraging our strong distribution networks. As a result of NewPower’s excess capacity, we can rapidly increase production with minimal capital expenditures. Finally, we believe this acquisition illustrates our ability to identify and acquire strategic businesses that leverage our core strengths and further enhance our position in the rapidly growing lithium ion battery industry.”