Cummins Announces Acquisition Of Hydrogenics

- Nov 28, 2019-

On September 9, Cummins (NYSE: CMI) website news showed that the company has completed the acquisition of Hydrogenics.

"We are excited to welcome Hydrogenics employees to the Cummins family." Cummins Chairman and CEO TomLinebarger said that Hydrogenics is one of the world ’s leading suppliers of fuel cells and hydrogen production technologies, and their expertise and innovative methods will strengthen Cummins fuel cells Ability. This is another step forward as we continue to invest in a wide range of cleaning, fuel efficiency and high performance products and technologies to create value for our customers.

Data show that Cummins was founded in 1919 and is headquartered in Columbus, Indiana. Cummins is named after its founder, Clacy Lyle Cummins, who is a self-taught car technician and mechanical inventor. Cummins is a leading global power equipment manufacturer. It designs, manufactures and distributes engines and related technologies including fuel systems, control systems, intake air treatment, filtration systems, exhaust gas treatment systems and power systems, and provides corresponding after-sales services. service.

Cummins serves customers through more than 6,000 dealers and distributors in more than 190 countries around the world. Cummins has 62,600 employees worldwide, with annual revenue of $ 23.8 billion in 2018 and net income of $ 2.1 billion. The company ranked 128th in the 2019 Fortune 500 list.

Looking back, Cummins began to develop its fuel cell capabilities more than 20 years ago.

Hydrogenics is located in Mississauga, Canada and has production facilities in Germany, Belgium and the United States. It is a public company listed on the NASDAQ (HYGS) and the Toronto Stock Exchange (HYG).

Hydrogenics is a global leader in the design, manufacture, construction and installation of industrial and commercial hydrogen power generation, hydrogen fuel cells, and MW-class energy storage solutions. The company's business includes PEM and alkaline hydrogen generators for industrial processes and gas stations. Hydrogen fuel cells for electric vehicles, fuel cell devices for stand-alone power plants, critical power supplies and UPS systems (uninterruptible power supplies), "Power-to-Gas" is the world's most innovative storage and transportation energy the way.

Hydrogenics has many partners in China. The most well-known is Hydrogenics, which supplies graphite panels to Yihuatong, and Snowman's subscription of Hydrogenics not exceeding 17.6%. In the first half of this year, the company's operating income was 18.54 million US dollars (about 130 million yuan), an increase of 17.67% year-on-year, and its net profit was -74.13 million US dollars. The increase in revenue was mainly from the on-site hydrogen production business in Europe and the United States, an increase of 59% year-on-year; the revenue of power system increased by 17% year-on-year.

In June of this year, Hydrogenics announced an agreement with Cummins. A subsidiary of Cummins has agreed to acquire all issued ordinary shares of Hydrogenics, with the exception of Hydrogenics shares owned by a wholly-owned subsidiary of Air Liquide. $ 15 cash per share. Under the transaction, Hydrogenics has agreed to exchange its shares for buyer shares.

Today, Cummins officially completes the acquisition of Hydrogenics and is expected to enhance Cummins' fuel cell capabilities and add new hydrogen production technologies.

"Air Liquide and Cummins share a common view of the key role that hydrogen plays in the energy transition. As a shareholder and more broadly as a company, Air Liquide Group strongly supports the hydrogen society." Pierre Etienne Francc, a senior staff member of an Air France subsidiary Said that the two global companies have complementary expertise in hydrogen energy development. Thanks to Cummins' investment, we believe that Hydrogenics technology will be able to significantly accelerate its development.

Cummins website news shows that Hydrogenics will report in Cummins' electrification business unit, which is led by ThadEwald, vice president of corporate strategy, and its business will continue to be headquartered in Mississauga, Canada. Established in 2018, the ElectrifiedPower business designs and manufactures all-electric and hybrid systems as well as innovative components and subsystems to serve the commercial market when electrified. To date, the company has introduced complete electrified powertrain solutions in six markets with seven applications and continues to introduce market-leading products to customers worldwide.

After the completion of the acquisition, each share is US $ 15.00, which is equivalent to an enterprise value of approximately US $ 290 million, and has been approved by Hydrogenics shareholders, the High Court of Ontario, and other customary closing conditions. Air Liquide will own approximately 19% of the company, while Cummins retains approximately 81% ownership and will fully integrate the entity in its financial statements. Hydrogenics will be delisted from the Toronto Stock Exchange and the Nasdaq Stock Exchange upon receiving the final required approvals.

Cummins continues to predict that the company will return 75% of its operating cash flow to shareholders this year in the form of dividends and share repurchases.