Nel ASA has acquired Proton Energy Systems Inc. (Proton OnSite) in a $70m deal that creates the world’s largest electrolyser company.

The Norway-based business entered into a non-binding term sheet to acquire the US-based hydrogen (H2) technology company, it announced yesterday.

The takeover is described as a “strong strategic fit,” with synergies related to sales and commercialisation, product portfolio, research and development (R&D) and best practices across the combined company.

Incorporated in 1996, Proton OnSite has developed into the largest manufacturer of onsite H2 generators with over 2,600 units installed worldwide in more than 75 countries.

Nel CEO Jon André Løkke highlighted the potential of the united enterprise, stating, “Proton OnSite is recognised as the number one provider of proton exchange membrane (PEM) electrolysis systems and fully complements Nel in both terms of technology and market outreach. The combined entity will be able to offer the full spectre of electrolysers in terms of capacity and technology.”

”The combined entity will be able to offer the full spectre of electrolysers in terms of capacity and technology”

Jon André Løkke, Nel CEO

“This will give Nel a strong foothold in the US and other markets beyond our current position. Proton Onsite also has a very…solid backlog going into 2017.”

Robert Friedland, President and CEO of Proton OnSite, added, “We see strong strategic benefits from combining our technological footprint and think we can accelerate our combined growth and benefit from all the exciting opportunities we see ahead of us.”

The term sheet between shareholders of the two parties is non-binding with the contemplated acquisition still subject to the successful negotiation of a mutually agreed share purchase agreement.

The transaction is expected to be finalised in the second quarter of 2017 following ordinary closing conditions, including the receipt of any public approvals required.

Nel has also launched a Private Placement of up to 65 million new shares directed towards Norwegian and international investors, representing around 9.5% of the outstanding capital in the company. The price in the Private Placement will be determined through an accelerated bookbuilding process.