Knobias Clip Report (10-18-2007)

Sumbmited From Knobias ClipReport

TWRT: Wind Turbine Tower Provider Reaches New Highs

Thursday’s session saw investors a little wary following Bank of America’s earnings miss. Friday’s session will undoubtedly be dominated with speak of Google’s earnings which are due following the close of Thursday’s session.

Also contributory to the unease was employment data. The Labor Department reported an increase of 28,000 in the number of those seeking new jobless claims, bringing the count to 337,000 last week. While oil prices made all time highs again, the dollar sank to new lows against the Euro.

The safe place to park money seemed to be the solar sector, again. Alternate energy and more specifically, the solar industry, is growing tremendously with China based names leading the way. But one area in the alternate energy sector that investors should not overlook is wind.

Wind energy which has long been seen as a supplemental energy source and not a primary resource, but wind power is striding into national public view as the elegant icon of energy security and action to curb global warming, and for good reason. Clean, cost-effective, inexhaustible, and readily available, wind power is an essential element of the solution to both climate change and America’s increasing demand for electricity.

One Company is heavily involved in the construction of these wind harnessing turbines. Tower Tech Holdings, Inc (TWRT) is headquartered in Manitowoc, Wisconsin and is dedicated to the production of wind tower support structures for the wind turbine industry.

The Company recently announced that it closed the previously announced acquisition of RBA, Inc., a Manitowoc, Wisconsin-based fabricator of components for energy-related industries. Tower Tech purchased all of the outstanding stock of RBA for $5 million. Tower Tech expects that the acquisition will expand its product portfolio for the wind turbine industry and increase its energy-related fabrication capabilities.

On August 22nd, the Company also announced an agreement to acquire Brad Foote Gear Works, Inc., an Illinois-based manufacturer of gearing systems for the wind turbine, oil and gas and energy-related industries. During the first six months of 2007, Brad Foote had revenues of approximately $37 million, with a significant portion of the revenues related to the sale of gear components to the wind turbine industry.

Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Brad Foote shareholders would receive an aggregate of approximately 16,000,000 shares of Tower Tech common stock. Brad Foote shareholders would also receive an aggregate of $64 million in cash as part of the consideration. The cash portion of the consideration was to be funded through both debt and equity financing, which would be structured to provide additional liquidity to facilitate the combined companies' future growth plans and working capital needs. Tontine Capital Partners, L.P. and its affiliates agreed to purchase 12,500,000 shares of common stock in a private placement at a purchase price of $4.00 per share and to provide $25 million of additional interim debt financing in the form of senior subordinated convertible notes. Tower Tech would also assume approximately $21 million of senior debt from Brad Foote. The company expects the acquisition to close by the fourth quarter of 2007.

In any event, the name is certainly one to follow as it rolls up wind turbine component and service providers in this growing market. Shares have rallied over the past few days on increased volume, reaching new 52 week highs on Tuesday, Wednesday, and Thursday. With that in mind, investors would be wise to watch.



Visit 1800blogger to see all of our industry leading blogs