Plug Power Inc. Announces Meaningful Progress in its Hydrogen Vertical Integration Strategy

Pursuing Two Acquisitions with Clear Path to Executing on Green Hydrogen Strategy

LATHAM, N.Y., May 07, 2020 (GLOBE NEWSWIRE) -- 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.