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 cell products.

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.

About AvCarb

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.

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