Shares of Ballard Power Systems Inc (NASDAQ:BLDP) jumped as much as 11.9% in trading Tuesday after the company announced the sale of some noncore assets. At 12:40 p.m. EDT, shares were still up 9.1% on the day.
Ballard Power Systems subsidiary Protonex is selling "certain non-core assets" related to the Power Manager business for $16.0 million in cash to Revision Military Ltd. Assets related to unmanned vehicles will remain with Ballard Power Systems. Of the cash, $4.75 million will be paid immediately and the other $11.25 million will be paid based on sales objectives over the next 12 months.
The move is part of Ballard's strategy of optimizing the portfolio to align with fuel cells long term. The added cash isn't bad news for the company, either.
This is a marginal impact for Ballard Power Systems long term and ultimately get the company out of the power-management business. Protonex was acquired in 2015 for $17.5 million, so this will ultimately be a loss for the company on the balance sheet, but that doesn't mean it isn't the right move. Investors are cheering the fact that Ballard was able to nearly break even on the investment now that it's shifting gears to focus on fuel cells, where it sees long-term value.