Plug Power Announces Acquisition of General Hydrogen

 

Plug Power Announces Acquisition of General Hydrogen


Publication Date:06-May-2007
08:00 AM US Eastern Timezone
Source:FuelCellWorks
Acquisition broadens electric lift truck portfolio following recent
acquisition of Cellex Power LATHAM, N.Y.; RICHMOND, British
Columbia--
Plug Power Inc. (Nasdaq: PLUG), a leader in providing clean, reliable
on-site energy products, today announced the acquisition of General
Hydrogen Corporation, a leader in the development and
commercialization of fuel cell power units that provide motive power
for electric lift trucks and other mobile industrial equipment.


Plug Power paid approximately USD 10 million, consisting of
approximately USD 7 million in cash and the assumption of USD 3
million in senior secured loans previously made by Plug Power to
General Hydrogen, for all of the outstanding capital stock of General
Hydrogen. In addition, the shareholders of General Hydrogen received
warrants to purchase up to 571,429 shares of Plug Power Common Stock.
The warrants become exercisable when Plug Power's Common Stock trades
at a volume weighted average price of USD 7.00 or more for 10
consecutive trading days. The warrants carry an exercise price of
USD .
01 per share and expire four years from the date of issuance.


General Hydrogen is located in Richmond, British Columbia, Canada,
within close proximity to Cellex Power Products, Inc., another top
supplier of fuel cell power solutions for electric lift trucks, which
Plug Power acquired last month. Plug Power plans to integrate the two
companies into one operation managed by Chris Reid, Cellex Power's
current President.


"By acquiring both General Hydrogen and Cellex Power, clear leaders
in
their industry, we expect to realize significant technology and
operational synergies as we pursue high-value applications in the
material handling market," said Dr. Roger Saillant, Plug Power's
President and CEO. "Further, we anticipate that higher volume
commercial product manufacturing activities will be established in
Plug Power's Latham, N.Y. facility."


General Hydrogen's initial product focus has been on the larger class
1 sit-down lift trucks that are typically used in manufacturing
operations. Cellex Power has focused its initial product initiatives
on class 3 rider pallet trucks primarily used to transport and select
goods within large distribution centers before delivery to retail
stores.


Both companies are developing fuel cell power units for class 2
stand-
up reach trucks, which provide flexibility and maximum floor space
utilization for large distribution centers. General Hydrogen and
Cellex Power are targeting the estimated USD 1.5 billion motive power
market in which lead-acid batteries are the incumbent technology.
Fuel
cell power units allow users to increase productivity and reduce
operating costs through a quick hydrogen refueling process that
eliminates the need to change batteries repeatedly throughout the
day.
They also eliminate the environmental and safety issues traditionally
associated with lead-acid batteries.


"We intend to leverage Plug Power's existing commercial
infrastructure
and expect to avoid some of the expenditures typically associated
with
the transition from a pre-commercial to commercial enterprise," said
Dr. Saillant. "Given Plug Power's financial and operational strength
and the combined fuel cell expertise of the three companies, we
expect
to accelerate product development for all three classes of electric
lift trucks. This enhanced scale and breadth of applications will
increase the economic value delivered to our customers while
improving
our ability to realize meaningful sales volumes."


Large lift truck fleet users typically operate at least two of the
three electric lift truck classes in their warehouses and therefore
require a battery handling system and associated maintenance labor to
meet their throughput requirements. Having all three electric lift
truck classes in its product portfolio would enable Plug Power to
create a much more compelling value proposition by allowing customers
to convert the motive power requirements for their entire fleets to
proton exchange membrane (PEM) fuel cell technology.


Coincident with the acquisition of General Hydrogen, Plug Power has
entered into a two-year agreement with Ballard Power Systems Inc. for
the purchase of fuel cell stacks for Plug Power's commercial needs
with respect to electric lift truck applications, replacing the
previous agreement between General Hydrogen and Ballard. The General
Hydrogen and Cellex Power products were designed around the Ballard
stack and have generated tens of thousands of operating hours to
validate reliability and performance. Under the new agreement, Plug
Power and Ballard will work together to drive reliable, low- cost
solutions that are expected to significantly improve the outlook for
fuel cell commercialization of material handling applications.


With the Cellex Power and General Hydrogen acquisitions, Plug Power
has positioned itself to engage both telecommunications and material
handling as attractive near-term markets and central components of
the
Company's revenue growth strategy.


About General Hydrogen Corporation


General Hydrogen, which was founded in 1999, is headquartered in
Richmond, British Columbia, near Vancouver, and has a sales and
service center in Gallatin, Tennessee. It is a private, Delaware-
registered company that develops and commercializes fuel cell power
units and hydrogen fueling solutions to address the motive power
requirements of a variety of electric lift trucks used in material
handling applications in indoor manufacturing operations and large-
scale distribution centers. General Hydrogen uses fuel cell stacks
made by Ballard Power Systems Inc. as a component of its fuel cell
power units. For more information, please visit http://www.generalhydrogen.com .


About Plug Power


Plug Power Inc. (Nasdaq: PLUG - News), an established leader in the
development and deployment of clean, reliable, on-site energy
products, currently integrates fuel cell technology into backup power
products for telecommunications, utility and uninterruptible power
supply applications, as well as motive power products for material
handling applications. The Company is actively engaged with private
and public customers in targeted markets throughout the world,
including North America, Europe, the Middle East, Russia, South
Africa
and South America. For more information about how to join Plug
Power's
energy revolution as an investor, customer, supplier or strategic
partner, please visit http://www.plugpower.com .