UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 26, 2006
ULTRALIFE BATTERIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
0-20852 16-1387013
- --------------------------------------------------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
2000 Technology Parkway, Newark, New York 14513
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(315) 332-7100
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On January 26, 2006, Ultralife Batteries, Inc. (the "Registrant") entered into a
stock purchase agreement (the "Stock Purchase Agreement") with Huang Deyong, Li
Xiaochun and Zhu Dehong (together, the "Sellers"), the sole shareholders of Able
New Energy Co., Ltd. Pursuant to the terms and conditions of the Stock Purchase
Agreement, the Registrant will acquire all the outstanding shares of Able New
Energy Co., Ltd., which is a manufacturer of lithium batteries located in
Shenzhen, China (the "Transaction"). There are no material relationships between
the Registrant or its affiliates and the Sellers, other than in respect of the
Stock Purchase Agreement. The Registrant expects to file the Stock Purchase
Agreement as an exhibit to its quarterly report on Form 10-Q for the Quarter
ended April 1, 2006. A copy of the press release issued by the Registrant in
connection with the Transaction is attached as Exhibit 99.1 to this report.
For business and legal reasons, the Transaction is being split into two steps.
In the first step, the Sellers will transfer their ownership interests in Able
New Energy Co., Ltd. to a holding company. The holding company is organized
under the laws of Hong Kong and owned by the Sellers. In the second step of the
Transaction, which will occur immediately after the first step, the Sellers will
sell their interest in the Hong Kong holding company to the Registrant, and the
Registrant will thereby become the indirect owner of Able New Energy Co., Ltd.
The Registrant expects the Transaction, which is subject to customary closing
conditions and approval by the Chinese government, to close during the second
quarter of fiscal year 2006.
At the closing of the Transaction, the Sellers will receive aggregate
consideration valued at approximately $4,200,000. The consideration will consist
of a combination of cash and equity securities to be issued by the Registrant.
The value of the cash component of the consideration will be $2,500,000, of
which $500,000 will be contingent upon the achievement by Able New Energy Co.,
Ltd. of certain performance milestones. The equity component of the
consideration will consist of 80,000 shares of the Registrant's common stock and
five-year warrants to purchase a further 100,000 shares of the Registrant's
common stock. The combined value of the equity component will be approximately
$1,700,000. If the price of the Registrant's common stock as of the closing date
of the Transaction is less than $12.50 per share, then the number of shares of
the Registrant's common stock to be delivered at closing will be increased from
80,000 shares to that number of shares as shall have an aggregate value of
$1,000,000. No adjustments shall be made to the number of shares to be delivered
at closing if the price of the Registrant's common stock as of the closing date
of the Transaction is more than $12.50 per share. The exercise price of the
warrants will be $12.30 per share, which was the closing price per share of the
Registrant's common stock on the date the parties executed the Stock Purchase
Agreement.
Item 9.01. Financial Statements, Pro Forma Financials and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.1 Press Release dated January 26, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ULTRALIFE BATTERIES, INC.
Dated: January 26, 2006 By: /s/Peter F. Comerford
-------------------------------------
Peter F. Comerford
Vice President of
Administration & General Counsel
Exhibit 99.1
Ultralife Batteries to Acquire Chinese Battery Manufacturer for
Approximately $4.2 Million; Acquisition of Able New Energy Co. Expands
Ultralife's Global Presence and Product Line
NEWARK, N.Y.--(BUSINESS WIRE)--Jan. 26, 2006--Ultralife Batteries, Inc.
(NASDAQ: ULBI) has entered into a definitive agreement to acquire all of the
outstanding shares of Able New Energy Co., Ltd., an established, profitable
manufacturer of lithium batteries located in Shenzhen, China, for a combination
of cash, common stock and stock warrants for a total value of approximately $4.2
million. The acquisition, which is subject to customary closing conditions and
approval of the Chinese government, is expected to close in the second quarter.
Established in 2003, Able New Energy produces non-rechargeable
lithium-manganese dioxide and lithium-thionyl chloride batteries, and supplies a
variety of other non-rechargeable and rechargeable battery chemistries, for a
wide range of applications worldwide including utility meters, security systems,
tire pressure sensors, medical devices, automotive electronics and memory
backup, among many others. In 2005, based on preliminary unaudited figures, Able
generated approximately $300,000 in operating profit on approximately $2.3
million in revenue.
Under the terms of the agreement, the purchase price of approximately $4.2
million will consist of cash, common stock and stock warrants. The cash portion
of the purchase price is equal to $2.5 million with $500,000 of the cash
purchase price contingent on the achievement of certain performance milestones
of the acquired business. The equity portion of the purchase price will consist
of 80,000 shares of Ultralife common stock and 100,000 stock warrants, for a
total consideration of approximately $1.7 million. Ultralife anticipates that
this acquisition will be accretive in 2006.
"With more than 50 products, including a wide range of lithium-thionyl
chloride and lithium-manganese dioxide batteries and coin cells, this
acquisition broadens our expanding portfolio of high-energy power sources,
enabling us to further penetrate large and emerging markets such as remote meter
reading, RFID and other markets that will benefit from these chemistries," said
John D. Kavazanjian, president and chief executive officer. "In addition, this
acquisition will strengthen Ultralife's global presence, facilitate our entry
into the rapidly growing Chinese market and improve our access to lower cost raw
materials."
The current management team of Able New Energy will be retained as well as
the Able brand of products. Eric Hwang will remain as managing director and will
report to Philip Meek, Ultralife's vice president of manufacturing, who will be
responsible for the integration of Able and its products into Ultralife.
Information about Able New Energy is available at the company's web site,
www.able-battery.com.
About Ultralife Batteries, Inc.
Ultralife is a global provider of high-energy power systems for diverse
applications. The company develops, manufactures and markets a wide range of
non-rechargeable and rechargeable batteries, charging systems and accessories
for use in military, industrial and consumer portable electronic products.
Through its portfolio of standard products and engineered solutions, Ultralife
is at the forefront of providing the next generation of power systems.
Industrial, retail and government customers include General Dynamics, Philips
Medical Systems, General Motors, Energizer, Kidde Safety, Lowe's, Radio Shack
and the national defense agencies of the United States, United Kingdom, Germany
and Australia, among others.
Ultralife's headquarters, principal manufacturing and research facilities
are in Newark, New York, near Rochester. Ultralife Batteries (UK) Ltd., a second
manufacturing facility, is located in Abingdon, England. Both facilities are
ISO-9001 certified. Detailed information on Ultralife is available at the
company's web site, www.ultralifebatteries.com.
This press release may contain forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The potential
risks and uncertainties that could cause actual results to differ materially
include: worsening global economic conditions, increased competitive environment
and pricing pressures, disruptions related to restructuring actions and delays.
Further information on these factors and other factors that could affect
Ultralife's financial results is included in Ultralife's Securities and Exchange
Commission (SEC) filings, including the latest Annual Report on Form 10-K.
CONTACT: Ultralife Batteries, Inc.
Pete Comerford, 315-332-7100
pcomerford@ulbi.com
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations:
Jody Burfening, 212-838-3777
jburfening@lhai.com
or
Media:
Chenoa Taitt, 212-201-6635
ctaitt@lhai.com