Azure Dynamics Corporation, a developer and manufacturer of hybrid electric and electric components and powertrain systems for light and medium duty commercial vehicles, has closed a previously announced equity investment by a strategic investor, which is a wholly-owned Canadian subsidiary of Johnson Controls Inc.
Johnson Controls’ Canadian subsidiary acquired, on a private placement basis, 30,796,969 common shares of Azure, at a price of CDN$0.165 per common share, for gross proceeds to Azure of CDN$5,081,500. As a result of the Equity Investment, Johnson Controls, through its Canadian subsidiary, now holds approximately 7.2% of the issued and outstanding common shares of Azure.
In connection with the closing of the investment, Azure has also entered into an agreement with Johnson Controls providing for certain amendments to, and an expansion of, Johnson Controls’ existing supplier relationship with it.
Azure plans to use the net proceeds of the investment to fund its ongoing product development as well as general corporate and working capital requirements.
Johnson Controls currently is the supplier of Li-Ion batteries to power Azure’s Balance and Force Drive systems. In June 2010, Azure entered into an agreement with an affiliate of JCI which provides JCI with certain rights of participation in any bidding process initiated by Azure for the supply of batteries and battery systems for future product offerings. Unless terminated earlier by either party, this agreement expires in June 2015. As part of the June 2010 agreement, Johnson Controls made its initial investment of CDN $6.324 million in Azure.