Loop Energy, a Burnaby, British Columbia-based hydrogen fuel cell company, is speaking with investment banks about underwriting its 2020 IPO, said CEO Ben Nyland.
The Canadian company is seeking to list on either NASDAQ or the Toronto Stock Exchange, or potentially a dual listing on both exchanges, Nyland added.
With trucking companies and bus operators switching from diesel to hydrogen fuel cell engines, Loop considers a 3Q20 or 4Q20 timeframe for a successful IPO to be realistic, Nyland said.
“The diesel engine conversion factor represents hundreds of billions of value for hydrogen fuel cells,” he added, pointing to the billion-dollar-plus market cap valuations of global comps Ballard Power Systems [NASDAQ: BLDP] and PowerCell Sweden AB [FRA:27W], a fuel cell company spun off of Volvo Group [STO: VOLV-A] in 2008.
On 18 September, original equipment manufacturer Cummins [NYSE: CMI] invested up to CAD 5m (USD 3.7m) in Loop. Nyland said there is still a chance that the company could be acquired outright by a strategic group in the year ahead.
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He maintained, however, that the company has the right value proposition to sell hydrogen fuel cells into the global transportation market, thus a public listing is the preferred exit route.
In June, Cummins acquired a majority interest in Loop’s main competitor, Hydrogenics, for USD 210m. Cummins did not return messages seeking comment.
Prior to an exit, Loop Energy expects to finish construction of its Beijing manufacturing facility, slated for the end of 1Q20, Nyland said. In October, Loop joined forces with Beijing IN-Power Electric Co. to form a Chinese joint venture while IN-Power provided equity round for Loop’s Chinese production of heavy-duty power systems.
Peterbilt Motors is Loop’s North American partner at its Los Angeles hydrogen facility, while SinoTruk, owned by China National Heavy-Duty Truck Group [SHA:000951], is its partner in China. Loop’s cells are installed in Peterbilt and SinoTruk truck engines.
Fort Capital advised Loop Energy on its Chinese equity round. Fasken Martineau is the company’s law firm, while PwC is its financial consultant and KPMG is its accountant.