Dutch on-site hydrogen gas production and supply specialists, HyGear, has announced that it has entered into a definitive agreement for the company to be acquired by Canada-headed Xebec Adsorption Inc. The new ownership structure will mark the launch of Xebec's hydrogen strategy and the next stage of growth for HyGear.
According to a statement, under the terms of the agreement, all of the issued and outstanding shares of HyGear’s parent company, Green Vision Holding (HyGear) will be transferred to Xebec Europe, a wholly-owned subsidiary of Xebec Adsorption Inc. (Xebec), against a EUR 82 million consideration.
HyGear’s shareholders will receive EUR 42 million in cash upon closing and the balance in Xebec Common shares at the weighted average trading price over the last 15 days prior to December 8, 2020, which shares will be admitted to listing on the TSX Venture Exchange in Toronto, Canada.
The acquisition is expected to close on or about December 30, 2020, and is subject to regulatory approval and other customary closing conditions.
New growth stage
HyGear has developed cutting-edge technologies for the on-site generation of industrial gases and the recycling of spent gases from the end user’s process. The combination of Xebec’s biomethane (aka renewable natural gas – RNG) and HyGear’s hydrogen generation technologies create a viable, credible, competitive, and readily available green hydrogen offering.
In addition, the combined companies will create an essential pathway across different geographies and markets and the ability to realize and create significant product and sales synergies.
Our businesses are highly complementary which places us in a strategic position in the hydrogen economy. Together with Xebec, HyGear will be able to accelerate further growth and create opportunities for our customers, business partners, and personnel worldwide. We developed our company with a highly motivated group of employees and the continuous support of Oost NL and a loyal investors base, trading our share certificates on NPEX stock exchanges. We are thankful to Oost NL for providing financing in several rounds, strengthening the operational execution power as well as building solid governance structures. This has created the basis for our next steps together with Xebec, said Marinus van Driel, CEO of HyGear.
After closing, HyGear CEO Marinus van Driel is to be appointed as President of Xebec Europe and will be a member of the global leadership team of Xebec Adsorption Inc. HyGear will be an integral part of Xebec Europe and its headquarters will remain in Arnhem, the Netherlands.
Ultimately, we believe that hydrogen will be the dominant gas and energy carrier of the future. HyGear has been able to build a growing and profitable business by first selling to industrial customers and then using the same technology to deliver solutions to the emerging hydrogen refuelling industry. The technologies of HyGear have the potential to be used in renewable natural gas and hydrogen installations and we see value in cross-selling these solutions throughout our service companies in North America and our combined customer base, commented Kurt Sorschak, Chairman, CEO and President of Xebec Adsorption.
Transactional implications
In the intermediate period between signing and closing of the transaction, which is expected on or about December 30, 2020, HyGear’s shares (Depository Receipts) will continue to be listed and traded at NPEX stock exchanges. At closing, trading is expected to stop and depositary receipts will be delisted and settled shortly after.
Detailed information on the last trading date and settlement of the Depository Receipts will be published in due course.
The Xebec common shares to be allocated to HyGear’s public investors are subject to a 4-month lock-up period, whereas HyGear’s two major shareholders, SDi Technology Ventures and Oost NL (East Netherlands Development Agency) are subject to a 15-month lock-up period in which the lock-up will be gradually released starting at 6 months after closing.
Since the transaction relates to the entire share capital of HyGear, the closing of the transaction results in a default under the terms and conditions applicable to each of the bonds issued by HyGear (Bonds). As a result of such default, the bondholders are allowed to, directly and at their sole discretion, demand early repayment of the Bonds.
The warrants issued in connection with certain bonds will be canceled by HyGear, in accordance with the applicable terms and conditions. The bondholders will also be informed separately on the above.
