Consolidation in the fuel-cell industry - Plug Power buys Cellex

Fuel-cell manufacturer Plug Power Inc. which produces backup power systems for the telecommunications industry is acquiring Cellex Power Products Inc. We've mentioned Cellex before as the fuel-cell manufacturer who partnered with Wal-Mart to undertake a trial of 12 hydrogen fuel-cell powered pallet lift trucks over four months. The $45 million acquisition, offset by Cellex's $8 million cash reserves, was made possible by a cash infusion into Plug Power last year by Russian group Smart Hydrogen.

The Wal-Mart testing was completed successfully in January with more than 18,500 hours of active work logged by the pallet lift trucks. Wal-Mart now considers the vehicles viable for ongoing use. One of the chief advantages of the fuel-cell units identified in the test was that they completely replaced the lift trucks' environmentally unfriendly lead-acid batteries.

Analysis: This is unlikely to be Plug Power's last acquisition after Smart Hydrogen's massive $217 million injection in 2006. Using fuel-cells to replace lead acid batteries is a huge step forward and I'm sure Wal-Mart's involvement is what made Cellex such an attractive target for Plug Power.



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