Tecogen to acquire American DG Energy Inc.

Written By: Stratton Report
November 2, 2016

On November 2, Tecogen Inc. announced that it will acquire all of the outstanding shares of American DG Energy Inc. in a stock-for-stock merger.

Per the firm, each share of American DG common stock will be exchanged for 0.092 shares of Tecogen common stock, valuing American DG at an approximately 27% premium to the company’s most recent closing share price.

The transaction is designed, according to Tecogen, to create a vertically integrated clean technology company that can offer equipment design, manufacturing, installation, financing, and long term maintenance service. The combined company will retain the Tecogen Inc. name and be led by Co-Chief Executive Officers John Hatsopoulos and Benjamin Locke.

John Hatsopoulos, co-founder, co-CEO, and director of both Tecogen and American DG remarked:

“We are extremely pleased with this transaction and believe that over time it will create significant value for shareholders. I’d like to thank the independent special committees of the boards of both companies for their diligent work to bring this deal to fruition.”

Upon closing of the transaction, Tecogen expects its shareholders to own approximately 81% and American DG shareholders are expected to beneficially own approximately 19% of the combined company. The stock-for-stock transaction is intended to be structured such that it is tax-free to shareholders.

The transaction is expected to close in the first half of 2017.

Scarsdale Equities issued a fairness opinion to the Special Committee of the Board established by Tecogen Inc. in connection with the transaction, and White, White and Van Etten, P.C. acted as the Special Committee’s legal counsel. Cassel Salpeter & Co. were financial advisors to the Special Committee of the Board established by American DG Energy Inc. and Gennari Aronson, LLP was legal counsel to the American DG Special Committee.