Orbital Energy Group (OEG) Announces Intent To Acquire Privately Owned, Atlanta-Based Telecommunications Company Gibson Technical Services

March 30, 2021 8:03 AM EDT

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Orbital Energy Group, Inc. (NASDAQ: OEG)("OEG") today announced it has reached an agreement in principal and is preparing a definitive Stock Purchase Agreement ("SPA") to acquire 100% of Gibson Technical Services ("GTS"), an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990. The transaction is expected to close on or before April 30, 2021, subject to customary closing conditions.

The acquisition will immediately add significant revenues and earnings to OEG. For the calendar year 2020, GTS's audited results include gross revenues of approximately $40.0 million, gross profit of ~$6.8 million and unaudited adjusted EBITDA of ~$5.5 million. For 2021, GTS expects to generate revenues of ~$50.0 million and EBITDA of ~$8.0 million.

Upon completion of the acquisition, GTS will become a wholly-owned subsidiary of OEG. The senior management team, including CEO, Mike McCracken, COO, Jon Martin, and CFO, Robert Moore will remain with the company. OEG expects no organizational changes to GTS's successful, long-term operations.

"We believe the acquisition is an excellent platform to build our telecommunications services and profitable revenue growth going forward. GTS's recognized expertise in telecommunications, including: broadband and technical services; construction; distributive antennae systems ("DAS"); wireless capabilities; and more, provides a comprehensive range of solutions for its customers in a market that has significant momentum for years to come primarily driven by the rollout of 5G spectrum; the increasing bandwidth requirements in areas such as healthcare, entertainment, and other public venues; and the FCC's recently announced $9.2 billion Rural Broadband Rollout Initiative (RBRI)," stated Jim O'Neil, OEG's Chief Executive Officer & Vice-Chairman.

The SPA calls for purchase of the outstanding shares in GTS for a gross purchase price of $48.0 million or approximately 6x GTS's forecasted 2021 EBITDA. The purchase is being funded by available cash resources and 2-year restricted shares of OEG common stock.

With GTS's Master Services Agreements, capabilities, reputation, and extensive contacts throughout the telecommunications industry, this acquisition is the first of several acquisitions the Company plans to execute upon this year, as OEG implements its strategy to transform into a full-service electrical, telecommunications, renewable infrastructure services platform.

"This transaction further diversifies OEG's service offerings, positions the Company to accelerate profitable revenue growth and adds immediate value to our shareholders," explained O'Neil. "GTS's talented base of technical employees and world-class team, not to mention their sterling reputation within the telecommunications industry, combined with our own resources will enable us both to further penetrate the telecommunication market. OEG's established network and capital markets access will allow GTS to expand both organically and through additional acquisitions enabling GTS to market its broad portfolio of technical services to a much larger customer base and geographic footprint."

"This is a very significant company milestone for GTS," explained GTS's CEO, Mike McCracken. "With the combination of these two companies we will now be able to increase our programs and services to our existing customer base, as well as pursue growth opportunities across a much broader market. We look forward to a long and profitable partnership with OEG and its portfolio of companies."

Since its founding in 1990, GTS has focused on providing superior customer service, advanced technology solutions and a dedication to quality and safety unequaled in the telecom industry. GTS's customers, including Cox Communications, Charter Business, Comcast Business, Verizon, and other industry leaders, rely on its team of talented and knowledgeable employees for crucial technical support and specialized knowledge. Its value-added services reduce the time to identify, design and construct the cost-effective delivery of a broad range of telecommunications projects.

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