Friday, August 12, 2011
Active Control Signs Share Purchase Agreement To Acquire Powercart
Accretive combination includes working capital; strengthens sales team, management and margins
Toronto
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TORONTO, Ontario August 12, 2011 - Active Control Technology Inc. ("ACT" or the "Company"), a leading provider in the design, manufacture and marketing of both wireless and fiber network solutions for mine communications, and the commercial security and access control industries, announced today that it has executed a binding share purchase agreement ("Agreement") with the shareholders of PowerCart Systems Inc. ("PowerCart") to acquire all of the issued and outstanding shares of PowerCart for 5,834,833 post-consolidation common shares of ACT.

Further to the previous press release of April 6, 2011, the outstanding capital of ACT will be consolidated on the basis of one (1) post-consolidation common share for every twenty (20) outstanding common shares before closing the transaction with PowerCart (the "Consolidation"). The Consolidation received shareholders approval at ACT’s Annual General and Special Meeting of Shareholders held on Thursday February 10, 2011. The Company will be filing Articles of Amendment shortly to effect the Consolidation and will issue a press release advising of the effective date on which the Company’s common shares will trade on a post-consolidated basis. After giving affect to the transaction and the Consolidation, shareholders of PowerCart will hold 33% of ACT on closing. In addition, the vendors will be granted two seats on ACT’s board of directors.

PowerCart currently has annual revenues of $2.5 million and earnings of $240k which will be immediately accretive to ACT. The new combined entity is expected to be cash-flow positive with improvements in margins and overheads.

The combination is expected to bring considerable synergies:

• Strengthened management team with expertise in contract manufacturing and cost optimization
• Additional sales team for new business development
• Cash and access to additional capital
• Immediate improvement in gross margins from integration of a key supplier
• Strengthened engineering and regulatory talent
• Existing locations improve proximity to customers, and
• Considerable tax loss carry-forwards to shield earnings.

"We are thrilled with the synergies that the PowerCart team will bring to ACT" said Graham Warren, ACT’s CEO. Jonathan Emanuel, PowerCart’s CEO commented: "by joining forces, we can fully capitalize on ACT’s industry-leading technology and market position as well as continue to grow PowerCart’s strong customer base".

The transaction is expected to close within two weeks.