The boards of Hydrogenics Corpor-ation and Stuart Energy Systems

Corporation – both based in theToronto suburb of Mississauga – haveagreed that Hydrogenics will acquireStuart Energy in a deal worth approxi-mately C$155 million (US$129 million).Hydrogenics is making a shareexchange takeover bid to acquire all ofthe issued and outstanding commonshares of Stuart Energy, at an exchangeratio of 0.74 Hydrogenics shares forevery Stuart Energy share.

The offer has the unanimous support ofStuart Energy’s board of directors, which is rec-ommending that the company’s shareholdersaccept the offer. A number of its largest share-holders and each of its directors and officers,who collectively hold 13.6m shares representingapproximately 37% of Stuart Energy’s issuedand outstanding common shares, have enteredinto a lock-up agreement with Hydrogenics,and agreed to tender their shares to the offer.

‘This acquisition gives us a breadth of capa-bilities, sustainability and resources that we pre-viously did not possess,’ comments PierreRivard, president/CEO of Hydrogenics. ‘Inaddition to expanded market and product pene-tration, the combination will expand our rev-enue base and cash reserves considerably, andwe expect it will be accretive to earnings, EBITDA and cashflow. The acquisition is alsoconsistent with our strategy of nurturing a port-folio of value streams so as to reduce our expo-sure to a singular product, singular market andsingular adoption rate.’

Jon Slangerup, president/CEO of StuartEnergy, adds that both companies have pursuedcomplementary strategies to achieve profitabili-ty through targeting large existing commercialmarkets, managing cash utilization, partneringwith strong strategic partners, and offering acompelling portfolio of multi-purpose products.‘By combining the strengths of our two teams,

expanding our product offering, and leveragingour strategic relationships, I believe our inte-grated company will deliver increased value andimproved financial performance to our share-holders,’ he explains.

The integrated company will be well financedand positioned to pursue its aggressive businessplan for global growth. Following the closing ofthe transaction, Hydrogenics expects to haveapproximately US$120m in cash and short-terminvestments, a lean structure that can grow withincreased adoption of hydrogen and fuel cells,an unmatched product portfolio and an acceler-ated pathway to profitability.

The integrated company will continue tobe led by Pierre Rivard, as president/CEO.Stuart Energy will nominate three directors tothe Hydrogenics board on the closure of thetransaction.

In addition to financial and managementstrength, Hydrogenics will have an unmatchedproduct portfolio and expanded global reach.The integrated company also expects toachieve significant synergies in productioncost, supply-chain management and utilizationof existing systems and processes that willdrive margin improvement and shorten thetimeline to profitability. In total, the integrat-ed company expects to achieve US$8 millionin annual synergies.

The offer is subject to customary conditions,including that at least two-thirds of StuartEnergy’s shares are tendered. In addition, it issubject to termination by Stuart Energy in lim-ited circumstances, including in the event that asuperior proposal is received; a termination feeof C$3.5m would be paid to Hydrogenics.

Two years ago Hydrogenics acquired BC-based Greenlight Power Technologies to sig-nificantly expand its global fuel cell test busi-ness, while at around the same time StuartEnergy acquired the Belgian electrolyzer business Vandenborre Technologies [FCB,February 2003].

Hydrogenics to acquire Stuart Energy SystemsNEWSCaFCP develops new apparatus for

testing hydrogen fuel stations 2Astris signs for revenue-generating

Italian deal 2GTI converts ethanol into hydrogen 2Fuel cell prototype using new

Ticona material 3ESL expands SOFC ceramic tape capacity 3Jülich unveils DMFC-powered JuMOVe 3FCE, Chevron Energy Solutions sell first

DFC1500 in California 4Hydrogenics expands HyPM power

module line 4MTI Micro wins Marines, Army DMFC

contracts 4Palcan UPS and stack for Chinese oil

pipeline trial 5Siemens Westinghouse in Italian SOFC

project 5Fideris unveils new productivity solutions 5Global fuel cell sales rise 41% in 2003 6Biogas used in PEM fuel cell demo 6Versa buys strategic assets of FCE’s

Canadian SOFC operations 6Hy-Light hybrid FCV demo in China 7ITS-Davis joins CaFCP, links with Québec

center 7CFCL’s SOFC can run on renewable ethanol 7Reinz award for integrated bipolar plate 8Quantum ships first FCV to Army vehicle

center 8DOE hydrogen research awards 8NZ in DOD demo of ReliOn fuel cell 9BP opens H2 stations in Michigan, LA 9MTU CFC Solutions orders more DFCs,

begins dual-fuel operation 10Voller’s new portable uses

DOT-exempted metal hydride canisters 10Contracts for Proton regenerative

fuel cells 10SHEC Labs, Hydrogenics in strategic

partnership 11Special forces contract for Jadoo 11Ford’s new assembly complex to include

fuel cell R&D center 11

FEATUREPerformance of anode-supported SOFCs

fabricated with electrophoretic deposition techniques 12–15

REGULARSIn Brief 3, 5, 7, 9, 11Research Trends 16–17Patents 18–19Events Calendar 20

Contents

An International Newsletter

fUelCELLSBULLETIN www.fuelcellsbulletin.com

ISSN 1464-2859 December 2004

ISSN 1464-2859/04 © 2004 Elsevier Ltd. All rights reservedThis journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use:PhotocopyingSingle photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or sys-tematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educationalclassroom use.