Minnetonka-based Communications Systems is a company that sells connectivity products for broadband networks. But on Wednesday it said it is shifting gears by merging with a company that focuses on the growing home solar industry.
In the past year, Communications Systems (CSI) has sold a business line and plans on selling the rest as part of the strategy around merging with privately held Pineapple Energy, based in Wayzata.
The company also is adopting the Pineapple name, and its stock symbol will change from JCS to PEGY. Shares would continue to trade on Nasdaq.
"By reinventing [Communications Systems] through this proposed merger, we will set the stage to become a fast-growing and profitable company, with a focus on delivering immediate value to our shareholders while retaining an opportunity for long-term appreciation," Roger Lacey, the company's executive chairman, said in a news release.
A committee of Communications Systems' board of directors has been looking at ways to enhance shareholder value for the past three years, Lacey said in a conference call announcing the Pineapple merger.
Communications Systems sold its Suttle Inc. business in the last year. In December, the company decided that the remaining business units would grow better and deliver more value to different owners.
The divestiture of the remaining businesses will be used for a special dividend to existing CSI shareholders.
For 2019, its most recently reported fiscal year, the company had revenue of $51 million and earnings of $6.5 million.
