Nel ASA (Oslo, Norway; www.nelhydrogen.com) has entered into a non-binding term sheet to acquire the Connecticut-based hydrogen technology company Proton Energy Systems Inc. (Proton OnSite; www.protononsite.com ). This will create the world’s largest hydrogen electrolyzer company with a global footprint. The purchase price corresponds to an enterprise value of $70 million. The contemplated acquisition will be settled by $20 million in cash, and new shares of Nel paid in equal instalments after 12 months and 24 months at an agreed share price of NOK 2.72.
“We are proud to announce the intention to combine Nel and Proton OnSite, creating the world’s largest hydrogen electrolyzer company. Proton OnSite is recognized as the number one provider of Proton Exchange Membrane (PEM) electrolysis systems and fully complements Nel both in terms of technology and market outreach. The combined entity will be able to offer the full spectre of electrolysers in terms of capacity and technology. This will give Nel a strong foothold in the U.S. and other markets beyond our current position. Proton OnSite also has a very motivated and talented organization, and a solid backlog going into 2017, says Jon André Løkke, Chief Executive Officer of Nel.
Incorporated in 1996, Proton OnSite has been developed into the largest manufacturer of onsite hydrogen generators with over 2,600 units installed worldwide in more than 75 countries. The company offers advanced PEM electrolysis systems to various markets, focusing on small- to medium-sized plants. Proton OnSite’s recently developed Megawatt product line is viewed as a significant area of focus and deemed to be a key success criteria going forward. The company had revenues of $27 million in 2016 and is headquartered in Wallingford, Conn.,with approximately 90 employees.
“Proton OnSite and Nel is a strong strategic fit, with synergies related to sales and commercialisation, product portfolio, R&D and best practices across the combined company. We expect a solid demand also for PEM electrolysers going forward and will by this acquisition be able to fully complement our product portfolio. Nel will be a one-stop-shop completely independent of your technology preference and our combined sales teams will be a global force to recon with,“ says Løkke.
“We look forward to joining forces with Nel, creating the leading hydrogen electrolyser company globally. We see strong strategic benefits from combining our technological footprint, and think we can accelerate our combined growth and benefit from all the exciting opportunities we see ahead of us. There is a strong cultural fit combining our two organizations, and we are excited to continue on this journey with Jon and his team”, says Robert Friedland, President & Chief Executive Officer of Proton OnSite.
The term sheet between Nel and Proton OnSite’s shareholders is non-binding, and the contemplated acquisition will be subject to the successful negotiation of a mutually agreed share purchase agreement. The transaction is expected to be concluded in the second quarter of 2017 and will be subject to ordinary closing conditions to be agreed, including the receipt of any public approvals required.