Plug Power Announces Agreement to Acquire Cellex Power

March 18, 2007 by Jeff Shepard

Plug Power Inc. announced execution of a definitive agreement to acquire Cellex Power Products Inc..

Plug Power and Cellex Power, a private Canadian company, have signed a definitive stock purchase agreement and expect to complete the acquisition in April. Plug Power intends to continue Cellex Power’s current operations in Richmond, near Vancouver, British Columbia, upon completion of the transaction, which is subject to satisfaction of customary closing conditions. Plug Power will pay USD 45 million in cash for all of Cellex Power’s outstanding shares. Cellex Power is expected to have approximately USD 8 million in cash and cash equivalents on hand at time of closing.

Since its inception in 1998, Cellex Power has been developing Proton Exchange Membrane (PEM) fuel cell power units for electric lift trucks and is targeting the estimated USD 1.5 billion industrial motive battery market. In November 2006, Cellex successfully completed beta testing of its zero-emission, hydrogen fuel cell power units in pallet trucks at two Ohio-based Wal-Mart distribution centers. Cellex Power has focused its initial product initiatives on class 3 electric lift trucks, often referred to as "pallet trucks," that are the predominant equipment used to transport goods within large distribution centers. The company’s product strategy is to develop a full product portfolio addressing all three classes of electric lift trucks, enabling complete conversion of distribution centers and maximizing customer benefit.

Plug Power considers telecommunications backup and material handling applications to be attractive near-term markets for PEM fuel cell power and has selected these as central components of the company’s revenue growth strategy. In addition, the two applications use complementary fuel cell technology and have similar electrical output requirements. Plug Power and Cellex Power expect to realize technology and operational synergies by leveraging the strengths of both organizations.