Mr. Guy McAree reports
BALLARD SELLS U.S. MATERIAL PRODUCTS DIVISION
Ballard Power Systems Inc. has closed an agreement to
sell the company's Material Products division, located in Lowell, Mass.,
for up to $12-million. Of this amount, $10.5-million was paid to
Ballard in cash on closing, with the rest payable on the basis of
2013 financial results associated with the Material Products division.
Substantially all the assets of the Material Products division were
purchased by investment group ALY Holdings LLC in partnership with the
division's senior management, through AvCarb LLC, a new company formed
as a result of the transaction.
Tony Guglielmin, Ballard's chief financial officer, said: "The Material Products division is
a non-core asset, with the majority of its sales generated in
industrial sectors, not related to fuel cells. This asset sale benefits
Ballard by fortifying our balance sheet with additional cash reserves.
We believe this transaction represents the best outcome in terms of
sale proceeds and continuity of supply, with no shareholder dilution.
As well, the sale enables a singular focus on our higher-growth fuel
cell product markets."
Ballard's fuel cell product revenue has experienced significant growth
in recent years, led by applications in telecom backup power and
material handling. Sales in these markets have led to a 30-per-cent annual
revenue growth rate over the past three-year period for the company's fuel
Roger Masse, president of AvCarb, said: "We are excited by the
opportunity this transaction creates for our company and our employees.
We will focus on serving our customers' evolving needs for engineered
carbon materials, while continuing to support fuel cell customers,
including Ballard, with advanced GDL material. The experience and
philosophy of the ALY Holdings team is also a great fit with our
management group and with the business."
In addition to the manufacture of carbon friction materials for various
industrial applications, AvCarb also manufactures gas diffusion
layer material used in the production of hydrogen fuel cells.
Under a supply agreement, AvCarb will continue to make GDL material
available to Ballard for use in the company's fuel cell products.
BMO Capital Markets acted as exclusive financial adviser to Ballard
throughout the divestiture process.
AvCarb is a leading supplier of specialty engineered carbon materials
for fuel cells and other industrial applications. To learn more about
AvCarb, please visit AvCarb's website.
We seek Safe Harbor.