Pioneer Power Solutions Enters Clean Energy Business With Purchase of Select AAER Inc. Assets

Pioneer Power Solutions, Inc., a manufacturer of liquid filled, encapsulated and ventilated transformers for utility, industrial and commercial applications, announced it has executed an agreement to acquire certain assets of AAER Inc. (AAER) based in Quebec, Canada. AAER is a North American manufacturer of high technology megawatt-sized wind turbines that deliver safe, renewable clean energy.

Under terms of the agreement, Pioneer will acquire most of the Inventory, Capital Assets, Intangible Assets and Intellectual Property of AAER for CDN $450,000 (approximately US $431,500) in cash. The acquisition is expected to close June 7, 2010. Upon closing, AAER will be renamed Pioneer Wind Energy Systems, Inc., a wholly-owned subsidiary of PPSI.

Pioneer will now have the ability to offer a diverse offering of wind energy systems including:

— A-1000S
A 1,000 kW stall-controlled three-bladed wind turbine designed for energy-efficient performance in all climates and geological conditions.
— A-1500
A 1,500 kW wind turbine with high-tech components for maximum availability in all types of wind conditions.
— A-1650
The A-1650 wind turbine is an upgraded version of the A-1500. The new configuration improves the output performance of the wind turbine generator for different wind classes.
— A-2000
The A-2000 wind turbine featuring a superposition gearbox concept with variable speed ratio, coupled to a synchronous generator that easily connects to the existing grid.

AAER will be renamed Pioneer Wind Energy Systems Inc. and form the basis of the U.S. company’s move into the wind turbine sector.

Nathan Mazurek, Chairman and Chief Executive Officer of Pioneer, commented, "We are excited to enter the burgeoning wind turbines business with the acquisition of these strategic assets. Offering these alternative energy systems is a natural extension of our business as we become a leading provider of wind power systems in North America."

Mr. Mazurek continued, "We will address the smaller wind energy projects where orders are expected to be in range of 1-5 wind turbines. Our goal is to reach an operating run rate of delivering between 50-100 wind turbines per year within the first three years. We will be able to leverage the existing sales efforts with those of PPSI and Jefferson Electric which we recently acquired. Offering wind energy systems will further diversify our customer base, revenue stream and growth potential."

Through its subsidiaries, Pioneer is a full line manufacturer of liquid filled, encapsulated and ventilated transformers, and has been for over 50 years. Pioneer serves customers in a variety of industries with particular emphasis on the electric utility, industrial and commercial markets in Canada and the United States.