What happened
Shares of Plug Power (PLUG 1.26%) stock tumbled 3% through 3:15 p.m. ET Thursday after the fuel cell maker announced that it has acquired cryogenic equipment manufacturer Joule Processing in a deal valued at $160 million.
So what
As Plug noted in its announcement, it actually acquired Joule last month with the intention of using the "proven cryogenic process technology that Joule developed for the gas processing industry [for] hydrogen liquefaction." With this acquisition, Plug aims to lower the cost of producing liquefied hydrogen by 25%. Plug paid $30 million up front for Joule and plans to pay the remaining $130 million of the purchase price over time in the form of "future earn outs."
Plug noted that it expects to get all that money back and more through "capital expenditure savings of approximately $200 million." Judging from investors' reaction to the news today, however, it seems they're not convinced about that part.
Image source: Getty Images.
Now what
Plug also revealed that it has signed a collaboration agreement with Atlas Copco Mafi-Trench Company LLC, which is the "turboexpander technology center within the Gas and Process division of Atlas Copco," and also with Fives, "a global leader in brazed heat exchangers and cryogenic cold boxes." Plug will cooperate with these two companies "to jointly develop hydrogen liquefaction plants" at which hydrogen gas is cooled (which shrinks its volume by transforming the gas into a liquid) to make for easier transportation.
Plug did not say how it expects either of these developments to affect future revenue growth or move the company closer to profitability. Management will have another chance to address these points next week when Plug reports its fourth-quarter earnings on Feb. 23.
Analysts expect Plug to report an $0.11 per-share loss on revenue of $157.3 million.
