Power Solutions International signs deal with Enchanted Rock

WOOD DALE - Power Solutions International and it's subsidiary Professional Power Products has signed a multiyear supply agreement with U.S. microgrid provider Enchanted Rock Ltd.

The agreement is valued at approximately $240 to $335 million over the first five years, subject to the attainment of certain targeted volume levels.

The new agreement expands the partnership between ERock and 3Pi, established by an earlier agreement signed in June 2016. The mutually exclusive, multiyear agreement specifies that ERock will purchase an additional, approximate $30 million of the new microgrid genset units from 3Pi in 2017 with volumes increasing significantly in 2018, 2019 and 2020. PSI will exclusively supply the Heavy Duty 21.9L engine to ERock for reliability microgrid applications in North America.

3Pi designs, manufactures, and sells custom-engineered, integrated electrical power generation systems for standby power, demand response, microgrid and cogeneration markets.

"This latest agreement with ERock solidifies 3Pi's shift of focus to the rapidly growing, high-value distributed generation markets (microgrid, demand response & CHP)," said Gary Winemaster, PSI's Chief Executive Officer. "Our emphasis on highly engineered solutions rather than commodity genset packaging, allows us to utilize our depth of engineering to take advantage of ongoing energy market trends. ERock is a market leader in the reliability microgrid space, and we are excited to have them as our exclusive, long-term partner."

The new agreement, combined with the original agreement has positioned 3Pi for significant revenue growth in 2017, Winemaster said. He expects 3Pi's 2017 revenue to greatly exceed its previous high water mark of $40 million, with continuing strong growth in the subsequent years covered by the agreement.