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Mergers and Acquistions News

Categories: Hardware

August 10th 2010, 16:45PM

US-based CommScope, which makes network cables for infrastructure and communications networks, will buy shares worth up to $8.5 million in Canadian firm Hydrogenics, a fuel-cell developer.

The two firms will work together to develop next-gen power modules for telecom-related backup power applications.

Four tranches, or installments, will be completed to execute the deal, which will see CommScope acquire a maximum of 2,186,906 shares with a maximum purchase price of $8.5 million (£5.3 million) across the four periods.

Its first tranche, expected to close on the 12th of August, will see the transfer of 879,393 shares at a purchase price of $3,237,046 (£2.05 million), or $3.68 (£2.30) per share. Completion of the first tranche will mean CommScope will own around 19.98 per cent of Hydronics.

Daryl Wilson, president and chief executive officer of Hydrogenics, said: "The agreement with CommScope strengthens our existing partnership and lays the foundation for a strategic relationship dedicated to penetrating the large and growing market for telecom backup power systems. We have already worked closely with CommScope in India, North America and Europe, and both companies see strong potential demand for power modules that address opportunities within the booming cell phone infrastructure around the globe."

According to Reuters, although fuel-cell firms like Hydrogenics boast some well-known clients, they have posted losses for several years.
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