- Sale of non-core asset for up to $12M fortifies balance sheet
VANCOUVER, Jan. 31, 2013 /PRNewswire/ - 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 cell products. 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.
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