Sale of non-core asset for up to $12M fortifies balance sheet
VANCOUVER, Jan. 31, 2013 /CNW/ - Ballard Power Systems (NASDAQ: BLDP) (TSX: BLD) has announced the closing of an agreement to
sell the Company's Material Products division, located in Lowell, MA
for up to $12 million. Of this amount, $10.5 million was paid to
Ballard in cash on closing, with the remainder 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 CFO 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% annual
revenue growth rate over the past 3-year period for the Company's fuel
Roger Masse, President of AvCarb LLC 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 LLC also manufactures gas diffusion
layer (GDL) material used in the production of hydrogen fuel cells.
Under a supply agreement, AvCarb LLC 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 advisor to Ballard
throughout the divestiture process.
About Ballard Power Systems
Ballard Power Systems (TSX: BLD) (NASDAQ: BLDP) provides clean energy
fuel cell products enabling optimized power systems for a range of
applications. Products deliver incomparable performance, durability and
versatility. To learn more about Ballard, please visit www.ballard.com.
About AvCarb LLC
AvCarb is a leading supplier of specialty engineered carbon materials
for fuel cells and other industrial applications. To learn more about
AvCarb, please visit www.avcarb.com.
This release contains forward-looking statements concerning the benefits
of this sale to Ballard and its shareholders. These forward-looking
statements reflect Ballard's current expectations as contemplated under
section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Any such
forward-looking statements are based on Ballard's assumptions relating
to its financial forecasts and expectations regarding its product
development efforts, manufacturing capacity, and market demand and
include the Company's expectations regarding the potential benefits of
the proposed transaction and the timing and success of future product
These statements involve risks and uncertainties that may cause
Ballard's actual results to be materially different, including general
economic and regulatory changes, detrimental reliance on third parties,
successfully achieving our business plans and achieving and sustaining
profitability. For a detailed discussion of these and other risk
factors that could affect Ballard's future performance, please refer to
Ballard's most recent Annual Information Form. Readers should not place
undue reliance on Ballard's forward-looking statements and Ballard
assumes no obligation to update or release any revisions to these
forward looking statements, other than as required under applicable
SOURCE: Ballard Power Systems Inc.
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