Victoria's Carmanah Technologies Corp. (TSX:CMH) has sold its home solar power division to former Carmanah director David Egles for $1.5 million.
The company said the move is part of a plan to focus its business on providing solar-powered lighting products and power generating systems for the commercial and industrial markets.
In 1985, Egles founded Soltek Power Source Ltd., which Carmanah acquired in 2005. He will leave the company to focus on developing a new business with Carmanah's home power assets.
As part of the deal, Egles acquired $1.15 million worth of Carmanah's solar home power inventory, $350,000 worth of equipment and fittings from the company's Barrie, Ontario, facility as well as marketing material and customer and vendor lists. Egles' non-compete agreement with Carmanah restricts him to doing business in the solar home power business.
The $1.5 million deal includes a cash payment of $500,000. Carmanah will also buy back $1 million worth of company common shares that Egles owned. Following the deal, Egles will maintain a 1% equity stake in Carmanah.
Carmanah's share price range during the past week: between $1.19 and $1.24; 52-week high: $3.51; 52-week low: $1.04.