A New York company has paid $4 million to purchase the assets of ReliOn Inc., the Spokane-based company that produces fuel cell systems.
Plug Power Inc., based in Latham, N.Y., said it will maintain ReliOn’s office in Spokane and will keep the ReliOn brand name on its products.
A news release said Plug Power also will add “key” ReliOn employees primarily in sales and engineering.
The Spokane company headcount was 45. Following the acquisition, the workforce will be around 25, said Gary Flood, who will retain the title ReliOn president.
ReliOn originally was a subsidiary created by Avista Corp. It was launched in 1995 under the name Avista Laboratories. After leaving Avista’s umbrella, the company has operated as a privately held startup.
Flood said the valuation of $4 million is well below what he and ReliOn investors were hoping for. But the entire hydrogen fuel cell industry faces challenges, with few companies being profitable. ReliOn is also not profitable, which explained why company directors needed to move the company forward by merging with another firm in the fuel cell industry, Flood explained.
The purchase provides Plug Power access into the market for stationary fuel cells, used as backup energy sources by a variety of large industrial and government customers.
Its customers in the telecom sector include AT&T, Sprint and Verizon.
Adding ReliOn’s technology will give Plug Power additional features that will be integrated into its own products, a news release said. A large majority of the units sold by Plug Power are used by material handling equipment. Instead of having to remove electric batteries in equipment, the fuel cells are steadily recharging the batteries, eliminating down time.
Hydrogen fuel cell technology converts hydrogen through chemical reactions to produce electricity to power backup energy systems.
Plug Power is publicly traded on the Nasdaq exchange. Its CEO, Andy Marsh, has told investors he expects the company to be profitable during 2014 following a streak of quarterly losses stretching back to the company’s founding in 1997.
Among the customers Plug Power works with are a number of industry giants, including Wal-Mart, Procter & Gamble and Sysco.