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Capstone Acquires Calnetix Microturbine Business

Posted on February 2, 2010

Capstone Turbine Corporation has acquired the TA100 microturbine product line from Calnetix Power Solutions, Inc. (CPS) and entered into a manufacturing sub-contract agreement and an original equipment manufacturer (OEM) agreement with selected exclusive rights to package a combined microturbine and waste heat recovery generator (WHG) product.

Under the purchase agreement Capstone acquired, subject to certain reserved rights relating to an existing license retained by CPS, all of the rights and assets related to the manufacture and sale of the CPS TA100 100 kW microturbine generator including intellectual property, designs, tooling, drawings, patents, know-how, distribution agreements and supply agreements. Under a separate agreement Capstone and CPS also entered into a manufacturing sub-contract arrangement under which CPS will continue to manufacture the TA100 turbines for Capstone from existing CPS TA100 backlog and selected new orders received. CPS had approximately US$7.5 million in product and aftermarket parts backlog at the time of closing.

Capstone and CPS also entered into a three-year OEM agreement under which CPS will supply its new 125 kW waste heat recovery generator system. In exchange for certain minimum purchase requirements, Capstone will have exclusive rights to sell the zero emission waste heat generator for all microturbine applications and for applications below 500 kW where the source of heat is the exhaust of a reciprocating engine used in a landfill application.

"CPS is extremely pleased to enter this long term strategic relationship with Capstone and to move from a competitive relationship to a collaborative relationship. By doing so we will leverage the combined companies' microturbine and waste heat recovery technologies," stated Brad Garner, president of CPS. "CPS is looking forward to leveraging the existing Capstone worldwide distribution channel and well known brand to quickly grow the market acceptance of our new waste heat recovery generator," he added.

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