Borqs Technologies Announces Binding Term Sheet to Acquire Solar Energy and Storage Company, Holu Hou Energy LLC
SANTA CLARA, Calif., Sept. 09, 2021 (GLOBE NEWSWIRE) -- Borqs Technologies, Inc. (Nasdaq: BRQS, “Borqs,” or the “Company”), a global provider of embedded software and products for the Internet of Things (IoT) and a portfolio company of Qualcomm Technologies, today announced it signed a preliminary binding term sheet to acquire a 51% ownership interest in Holu Hou Energy LLC (HHE), an innovative solar energy and storage provider for the residential, multi-family residential and commercial building markets. HHE has developed a state-of-the-art energy storage system for multi-dwelling unit properties and single-dwelling residences. HHE’s Smart Home Energy System also includes a remote monitoring, management and control platform. An important initiative of Borqs’s business strategy is focusing on growing its Smart Home Energy System platform, which addresses a US Smart Home market expected to grow to $62.7 billion by 2023, according to research firm Statista, and a global market expected to grow to $622 billion by 2026 (Fortune Business Insights, April 12, 2021). Holu Hou has nearly $150 million of projects in its development pipeline, with approximately $90 million in multi-dwelling unit projects and more than $57 million of commercial projects.
The HHE energy storage system utilizes a proprietary technology for the sharing of excess PV generation between multiple units in multi-dwelling unit (MDU) properties, which significantly increases the utilization of solar power generation while decreasing the number of batteries required. HHE is the only company in the US market currently able to deliver this innovative micro-grid capability, and the first to open the vast MDU market to solar generation. The first such site in the US, the 134-unit Koa’e Workforce Housing property, is now in operation in Kauai, Hawaii.
For residential housing, their systems include climate control, which optimizes air conditioning units, energy efficient lighting, solar arrays on the roof to meet energy requirements of the home, major appliance load control, energy for backup power and peak loads, and EV charger integration. The base product supports up to 4-strings of PV and up to 2x 15kWh batteries.
HHE has also developed and installed 60+ commercial PV projects ranging in size from 20kW-1.4MW and has a project development, design and financing capability.
HHE entered the market in Hawaii, where grid electricity rates are among the highest in the US, with approximately 50,000 MDU residences unserved by solar. It intends to expand into California in 2022, a market that is likely more than 30 times larger, with summer peak electricity rates tha can exceed $0.40/kWh, along with frequent grid outages.
The acquisition of a 51% interest in HHE is expected to benefit both companies with multiple synergies, including:
“Holu Hou’s differentiated and integrated residential energy storage system and energy share technology provides BRQS with proprietary technology and addresses a fast-growing multi-billion market opportunity. We believe this acquisition will put us on the path to high margin triple digital revenue growth that will generate significant EBITDA. It also provides BRQS with an entrance into the multi-family residential market. This is a key initiative of Borqs’s IoT smart city strategy,” commented Pat Chan, Chairman & CEO of Borqs Technologies. “Historically, multi-family properties have been closed to renewables due to load and vacancy risk. With Holu Hou’s advanced aggregation technology, these typical economic risks are mitigated, ultimately improving efficiency for the renewable investment. The system will benefit from Borqs’ state-of-the-art and secure IoT technologies for management and monitoring.”
“Based on current forecasts, Holu Hou is expected to generate $3 million EBITDA in 2021, with EBITDA contribution expanding to more than $31 million by 2025,” added Chan. “Holu Hou’s revenues are anticipated to grow seven-fold over the same period, reaching $145 million in 2025, up from an estimated $20 million in 2021.”
“We’re delighted to partner with BORQS Technologies to bring our vision of energy independence through solar and energy storage to communities and residences in the USA,” said Brad Hansen, Holu Hou Energy CEO. “BORQS brings several enabling IoT, supply chain and software development capabilities that will enable us to more rapidly accomplish our objectives in the markets we serve.”
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About Borqs Technologies, Inc.
Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products. The Company is also currently in development of 5G products for phones and hotspots.
About Holu Hou Energy LLC
Forward-Looking Statements and Additional Information
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