Plug Power Inc. (NASDAQ: PLUG), a leading provider of hydrogen
engines and fueling solutions enabling e-mobility, is pursuing
transactions to acquire United Hydrogen Group Inc. and an
electrolyzer technology platform company. Both acquisitions are in
line with Plug Power’s overall green hydrogen business strategy to
have over 50% of hydrogen be green by 2024 and, if successfully
completed, are expected to enhance Plug Power’s capabilities in
hydrogen generation, liquefaction and logistics business.
Plug Power is in advanced negotiations to acquire United
Hydrogen. Plug Power owns a convertible bond in United Hydrogen,
which could represent over 30% equity ownership on a converted
basis. United Hydrogen is the first independent company that brings
a full suite of experience in production, distribution and
logistics of liquid hydrogen, similar to industrial gas companies.
If completed, the acquisition is expected to be accretive
immediately and to have a meaningful positive impact on Plug
Power’s cost of hydrogen, especially as the Company goes into 2021
and beyond.
Today, United Hydrogen produces 6.4 tons of hydrogen daily with
plans to increase to 10 tons daily in the near future, and with
goals of further expansion. This 6.4 tons of daily liquid hydrogen
generation capacity has a low carbon footprint as it uses
by-product hydrogen from chlor alkali plants. Plug Power’s hydrogen
vertical integration strategy is designed to make hydrogen fuel
ubiquitous while controlling fuel cost and turning this into a cash
flow generating business.
“Plug Power will continue to work with its existing suppliers
and also look to build more strategic partnerships as the Company's
demand for hydrogen is expected to increase substantially,”said
Andy Marsh, Plug Power CEO. “Plug Power projects its hydrogen
demand to increase four-fold to over 85 tons of hydrogen a day by
2024 – up from over 27 tons per day today. In addition, the Company
plans for over 50% of that to be green hydrogen.”
In line with this green hydrogen strategy, Plug
Power is also pursuing the acquisition of an electrolyzer company.
If the acquisition is completed, this technology platform is
expected to provide Plug Power access to a range of electrolyzer
products from 100kW to 1MW+. In addition, Plug Power’s
manufacturing scale and experience is expected to allow for rapid
scaleup of this product line. Plug Power has a growing pipeline of
opportunities with its customers where the value proposition works
well with electrolyzer technology today. In addition, this
technology is expected to allow for Plug Power to expand its
addressable market opportunity into other industrial applications.
Leveraging electrolyzer and low-cost renewable power is key to a
green hydrogen economy and is in line with our stated goal of
having over 50% of hydrogen to be green by 2024. According to
Bloomberg New Energy Finance, the cost of green hydrogen is
expected to decline by over 50% by 2030.
Marsh continues, “We expect that both of these acquisitions
would provide Plug Power with comprehensive skill sets in the
entire hydrogen value chain and pave the way for going from
low-carbon to zero-carbon hydrogen as we continue to focus on
building the hydrogen economy.”
Plug Power has not yet entered into a definitive acquisition
agreement with either acquisition target and both transactions are
subject to the completion and execution of customary definitive
documents and satisfaction of customary closing conditions. While
Plug Power cannot guarantee that either acquisition will be
completed, based on the current state of negotiations and
transaction process, the company expects both acquisitions can be
completed by the end of the second quarter of 2020.
About Plug Power
Plug Power is building the hydrogen economy as the leading
provider of comprehensive hydrogen fuel cell turnkey solutions. The
company’s innovative technology powers electric motors with
hydrogen fuel cells amid an ongoing paradigm shift in the power,
energy, and transportation industries to address climate change and
energy security, while meeting sustainability goals.
Plug Power created the first commercially viable market for
hydrogen fuel cell (HFC) technology. As a result, the company has
deployed over 32,000 fuel cell systems for e-mobility, more than
anyone else in the world, and has become the largest buyer of
liquid hydrogen, having built and operated a hydrogen highway
across North America. Plug Power delivers a significant value
proposition to end-customers, including meaningful environmental
benefits, efficiency gains, fast fueling, and lower operational
costs.
Plug Power’s vertically-integrated GenKey solution ties together
all critical elements to power, fuel, and provide service to
customers such as Amazon, BMW, The Southern Company, Carrefour, and
Walmart. The company is now leveraging its know-how, modular
product architecture and foundational customers to rapidly expand
into other key markets including zero-emission on-road vehicles,
robotics, and data centers.
Plug Power Safe Harbor Statement This
communication contains statements that are not historical facts and
are considered forward-looking within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
include, but are not limited to, our expectations; regarding
entering into definitive acquisition agreements on two acquisitions
and closing such acquisitions in the second quarter of 2020; that
such acquisitions if completed, would enhance our capabilities in
hydrogen generation, liquefaction and logistics; that, if
completed, an acquisition of United Hydrogen would be immediately
accretive and would reduce our cost of hydrogen; regarding the
expansion of United Hydrogen’s hydrogen production capacity;
regarding the amount of hydrogen used by our customers by 2024;
regarding the amount of hydrogen that is green by 2024; regarding
our ability to guarantee hydrogen supply for customers, control
fuel cost, increase availability to green hydrogen and improve our
fuel business margin and cash flow; and that, if completed, the
electrolyzer acquisition would provide us with access to a product
line that we would be able to scale up rapidly and would expand our
market into other applications. These forward-looking statements
contain projections of our future results of operations or of our
financial position or state other forward-looking information. In
some cases you can identify these statements by forward-looking
words such as "anticipate," "believe," "could," "continue,"
"estimate," "expect," "intend," "may," "should," "will," "would,"
"plan," "projected" or the negative of such words or other similar
words or phrases, which are predictions of or indicate future
events or trends and which do not relate solely to historical
matters. We believe that it is important to communicate our future
expectations to our investors. However, forward-looking statements
involve numerous risks and uncertainties and depend on assumptions,
data or methods which may be incorrect or imprecise. There may be
events in the future that we are not able to accurately predict or
control and that may cause our actual results to differ materially
from the expectations we describe in our forward-looking
statements. Investors are cautioned not to unduly rely on
forward-looking statements. Actual results may differ materially
from those discussed as a result of various factors, including, but
not limited to: the risk that we continue to incur losses and might
never achieve or maintain profitability; the risk that we will need
to raise additional capital to fund our operations and such capital
may not be available to us; the risk of dilution to our
stockholders and/or stock price should we need to raise additional
capital; the risk that our lack of extensive experience in
manufacturing and marketing products may impact our ability to
manufacture and market products on a profitable and large-scale
commercial basis; the risk that unit orders may not ship, be
installed and/or converted to revenue, in whole or in part; the
risk that a loss of one or more of our major customers, or if one
of our major customers delays payment of or is unable to pay its
receivables, a material adverse effect could result on our
financial condition; the risk that a sale of a significant number
of shares of stock could depress the market price of our common
stock; the risk that our convertible senior notes, if settled in
cash, could have a material effect on our financial results; the
risk that our convertible note hedges may affect the value of our
convertible senior notes and our common stock; the risk that
negative publicity related to our business or stock could result in
a negative impact on our stock value and profitability; the risk of
potential losses related to any product liability claims or
contract disputes; the risk of loss related to an inability to
maintain an effective system of internal controls; our ability to
attract and maintain key personnel; the risks related to the use of
flammable fuels in our products; the risk that pending orders may
not convert to purchase orders, in whole or in part; the cost and
timing of developing, marketing and selling our products; the risks
of delays in or not completing our product development goals; our
ability to obtain financing arrangements to support the sale or
leasing of our products and services to customers; our ability to
achieve the forecasted gross margin on the sale of our products;
the cost and availability of fuel and fueling infrastructures for
our products; the risks, liabilities, and costs related to
environmental, health and safety matters; the risk of elimination
of government subsidies and economic incentives for alternative
energy products; market acceptance of our products and services,
including GenDrive, GenSure and GenKey systems; our ability to
establish and maintain relationships with third parties with
respect to product development, manufacturing, distribution and
servicing, and the supply of key product components; the cost and
availability of components and parts for our products; general
global economic and political conditions that harm the worldwide
economy, disrupt our supply chain, increase material costs or
reduce demand for our component products (including changes in the
level of gross domestic product in various regions of the world,
natural disasters, terrorist act, global conflicts and public
health crises such as the coronavirus); the risk that possible new
tariffs could have a material adverse effect on our business; our
ability to develop commercially viable products; our ability to
reduce product and manufacturing costs; our ability to successfully
market, distribute and service our products and services
internationally; our ability to improve system reliability for our
products; competitive factors, such as price competition and
competition from other traditional and alternative energy
companies; our ability to protect our intellectual property; the
risk of dependency on information technology on our operations and
the failure of such technology; the cost of complying with current
and future federal, state and international governmental
regulations; our subjectivity to legal proceedings and legal
compliance; the risks associated with past and potential future
acquisitions; and the volatility of our stock price. The risks and
uncertainties included here are not exhaustive, and additional
factors could adversely affect our business and financial
performance, including factors and risks referenced under "Risk
Factors" of this prospectus supplement and in the accompanying
prospectus or any free writing prospectus provided in connection
with this offering and any documents incorporated by reference
herein or therein, including our Annual Report on Form 10-K for the
year ended December 31, 2019 as well as any amendment or update to
our risk factors reflected in subsequent filings with the SEC. We
operate in a very competitive and rapidly changing environment. New
risk factors emerge from time to time and it is not possible for
management to predict all such risk factors, nor can we assess the
impact of all such risk factors on our business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from these contained in any
forward-looking statements. While forward-looking statements
reflect our good faith beliefs, they are not guarantees of future
performance. These forward-looking statements speak only as of the
date on which the statements were made. Except as may be required
by applicable law, we do not undertake or intend to update any
forward-looking statements after the date of this
communication.
SOURCE: PLUG POWER
Media Contact Ian MartoranaThe Bulleit
Group(415) 237-3681plugpower@bulleitgroup.com
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