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DPW Holdings Agrees to Buy Enertec Systems 2001

By Lisa Thompson


Yesterday CooliSys Technologies (a subsidiary of (NYSE:DPW)), agreed to buy Enertec Systems 2001 Ltd., of Azor, Israel, which is a subsidiary of Micronet Enertec Technologies, Inc. (NASDAQ:MICT) based in Montvale, NJ. The company will pay $5.25 million in cash and the assumption of debt, for a total of $9.25 million. The transaction is scheduled to close the later of 60 days or 15 days after delivery of Enertec's audited financials and is expected to close in Q1 2018. Management expects the deal to be accretive and cash flow positive and has had its eye on the purchase of this entity for a long time, as it is so synergistic with its operations.

Enertec is Israel's largest private manufacturer of specialized electronic systems for the military market, generates over $8 million of annual revenue, and has 70 employees. It provides solutions to various defense industry applications including missiles, UAVs, tanks, combat aircraft, missile boats and submarines, mobile trailers and satellites. Products include airborne power supply units, automatic testing systems, and simulators to command and control centers inclusive of all internal electronic systems, detection and protection systems for sensitive security installations and missile launching systems. This acquisition allows the two companies to benefit from the U.S. Department of Defense's Foreign Military Sales (FMS) and Military Financing (FMF) programs to expand its current defense business in Israel as well as with others in the global defense market such as India, NATO and other nations and agencies. As background, in 2016, the United States and Israel signed a new aid deal that gives the Israeli military $38 billion over the course of 10 years. This package provides $3.8 billion in funding per year, an increase from $3.1 billion per year under the current 10-year deal that expires in 2018. Under the agreement, Israel's ability to spend part of the funds on Israeli military products will be phased out and instead the funds shall be used for purchases from certified U.S. manufacturers of defense equipment and weaponry. Being owned by Coolisys allows Enertec to qualify. 

Update on Cryptocurrency Equipment

Coolisys stated that the first miner AC-DC switching power supply being produced by Digital Power will be for use by the Antminer S9 model by Bitmain Masters and can now be pre-ordered. The company is accepting $50 deposits for the $199 power supply but it has yet to begin to ship. The very popular and highly regarded Antminer S9 was the world's first dedicated bitcoin miner using an ASIC based on 16nm process on its system. Coolisys noted the new product line was a result of the agreement with PoW Digital Mining. The company claims its new SCP-9000 defines the state-of-the-art for blockchain mining rig power supplies. It provides 1600 Watts of continuous, digitally-controlled power on 15 Amp circuits of 115V or higher with an incredible 93.5% efficiency rating.

The company is under contract but has not yet closed on the acquisition of the electric generating dam with building on two acres, which the company plans to move cryptocurrency mining operations to. 

There are no revenues or earnings in any estimates for any of the cryptocurrency businesses. The building purchased has one 200WH and one 250WH generator to power mining equipment.

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