(Bloomberg) -- Plug Power Inc. has acquired two hydrogen companies for $123 million, moves that could turn the veteran manufacturer of fuel cells into a major supplier of the fuel that runs them.
Plug Power bought the gas producer United Hydrogen Group Inc. for $65 million in a deal that includes cash, stock and assumed debt, according to a statement Tuesday. It also acquired for $58 million Giner ELX, which makes electrolysis machines that generate hydrogen from water.
Plug Power said in May that it was in advanced talks to buy the two companies, although it did not name Giner at the time or provide financial details. Latham, New York-based Plug has struggled for years to turn a profit from its fuel cells, used to power forklifts and vehicles or serve as stationary sources of electricity.
Andy Marsh, Plug Power’s chief executive officer, said the purchases will drive down fuel costs and give customers a greener source of hydrogen, much of which is currently generated from natural gas. They’re also a key part of the company’s plans to reach $1.2 billion in revenue in 2024, up from $230 million last year. If, as some forecasts predict, hydrogen becomes a major source of energy for the world, supplying it could become a larger segment of Plug Power’s business than fuel cells, Marsh said.
“I already have the relationships, it could be a huge margin opportunity,” said Marsh, who added that the company is a major buyer of hydrogen. “Why don’t we do it ourselves?”
The news sent Plug Power’s stock soaring 15%, the most in more than two weeks, to $6.43 at the close in New York.
(Updates with share price in sixth paragraph.)
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