In other news, the company also said it has appointed its vice chairman James O'Neil to the additional role of CEO with immediate effect. O'Neil succeeds William Clough, who remains as CUI Global's executive chairman, president and chief legal officer.
In addition, Sarah Tucker, an oil and gas industry veteran, has been appointed to the board, effective immediately. She replaces O'Neil as an independent director, and her appointment increases the size of the board to seven from six.
The sale of the electromechanical business and O’Neil’s promotion are part of CUI Global's previously announced transformation plan to reshape the company into a diversified energy infrastructure services provider to the North American energy market through an aggressive acquisition strategy that leverages the traction that CUI Global's Orbital energy segment has gained.
The company said the transaction consideration is comprised of about $4.7 million in cash, paid at closing, the retirement of a promissory note worth approximately $5.3 million, and a guaranteed five-year earn-out receivable note of $5 million issued by the buyer to CUI Global.
The electromechanical business accounted for approximately 36% of CUI Global's Power & Electromechanical (P&EM) segment's revenues of $76.4 million in 2018. Upon the closing of the transaction, CUI Global will retain within the P&EM segment its power business, including an approximate 20% equity interest in Virtual Power Systems.
"The sale of our electromechanical business puts us on a path to divesting other, non-core business within the P&EM segment, strengthens our balance sheet, and will contribute to the buildout of a diversified energy services platform," William Clough, now CUI Global's executive chairman, said in a statement.
O'Neil former CEO of Quanta Services
Commenting on O'Neil's step up to replace him as CEO, Clough noted that its “the right time for me to hand the CEO title and responsibilities over to Jim so he can fully execute his vision for the company.”
O’Neil said he is ready to transform CUI Global “to increase shareholder value through acquisitions and profitable organic growth."
The new CEO has served as CUI Global's vice chairman since July 2019 and has been instrumental in formulating and executing on the company's transformation plan.
He was previously chief operating officer, chief executive officer and president of Quanta Services Inc, an infrastructure solutions provider for the electric power, oil and natural gas, telecommunications and renewable industries.
From 2008 to 2016 as COO and then CEO, O'Neil grew Quanta Services into a Fortune 500 enterprise with more than $7 billion in annual revenue at its peak through a combination of both organic growth and many strategic acquisitions. Institutional Investor Magazine named him 'Best CEO' in 2015 in the Engineering & Construction category and ranked Quanta No. 1 on its 'All-America Executive Team - Honored Companies' list in 2016.
CUI Global is an Oregon-based energy and technology-services company that operates five subsidiaries.
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