Ballard acquires key fuel cell assets from IdaTech
Ballard Power Systems today announced signing of an agreement to acquire key assets from IdaTech, including the Company’s fuel cell product lines for backup power applications, distributor and customer relationships, as well as a license to intellectual property. Payment for the acquisition of these assets will be made through the issuance of $7.7 million of Ballard common shares, at a price of US$1.08 per share. The shares will subsequently be transferred to IdaTech’s principal funder, Investec, a South African specialist bank and asset management company (http://www.investec.com). The transaction is expected to close on or about July 31, subject to TSX approval and other closing conditions.
Ballard has worked closely with IdaTech over the past several years, supplying fuel cell stacks for its systems, as IdaTech has developed markets, built key customer relationships and proven the commercial robustness of its direct hydrogen and methanol fuelled products. IdaTech’s methanol fuelled product line has proven its strong value proposition to customers such as AXIS in Indonesia, Telcel in Mexico and Vodacom in South Africa. These markets, which require frequent and extended run time backup power, have seen a strong preference by IdaTech’s customers for deployments of methanol fuel cell systems to replace traditional diesel generators.
John Sheridan, Ballard President and CEO said, “This transaction gives Ballard key benefits immediately, both financial and strategic. Financially, the transaction is expected to be accretive for Ballard’s revenue, EBITDA and cash flow in 2012 and beyond. Strategically, it provides Ballard with additional product capabilities with methanol fuelled systems and key customer relationships in leading markets for fuel cell commercialization, such as Southeast Asia, the Caribbean and Latin America as well as South Africa.”
South Africa is a market of special interest for fuel cell commercialization. Ballard has already delivered fuel cell systems to Anglo American Platinum Limited for demonstration in large scale backup power and mining locomotive applications. In addition, Ballard is working with Anglo American on development of a fuel cell home generator. And, following this asset purchase, Ballard will be working with existing IdaTech customers in South Africa, with whom more than 150 systems have already been deployed.
Investec has agreed to hold the majority of the Ballard shares issued under the transaction for a minimum period of 12 months, demonstrating its continuing support for the commercialization of fuel cells, with particular interest in South Africa, where Investec is a high profile and leading financial institution with a commitment to transformation initiatives.
Stephen Koseff, Investec Group CEO said, “Sustainability for Investec is about endurance and the interdependence of the three key areas of profit, people and planet. This transaction clearly aligns with that philosophy. And, we are excited to be directly involved with a market leader in Ballard, the fuel cell company best positioned to work with existing customers and to expand the base of installed fuel cell systems.”