Nanofilm Technologies International plans to pay $15 million to buy out the 35% stake held by partner Temasek Holdings in a hydrogen-focused joint venture.
Sydrogen Energy, as this joint venture is called, was formed in July 2021. Temsaek holds its stake via an entity called Venezio Investments.
According to Nanofilm in a July 5 announcement, taking over the partner's stake will give it "enhanced management control" over Sydrogen's operations and strategic direction.
"This transaction underscores Nanofilm’s long-term conviction in the hydrogen economy and its growth potential," says Nanofilm.
According to Nanofilm, Sydrogen Energy has "rapidly gained traction" in key markets, including China.
For example, its high-performance SydroDIAMOND coatings and its newly launched SydroPEARL solution for electrolysers are products "aligned with growing global demand for durable, cost-efficient hydrogen solutions."
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Under the JV agreement announced back in July 2021, Nanofilm's total initial investment in Sydrogen was up to $140 million.
The investment comprised of cash contribution of up to $21 million by Nanofilm and the transfer of its hydrogen energy business and licence of its intellectual property relating to the business for a 65% stake, with Temasek contributing cash for its 35% share of the JV.
The completion of this deal will take place in two tranches.
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The first tranche, constituting 11.67% of Sydrogen Energy’s existing share capital, is scheduled for completion in November 2025.
The second tranche, constituting the remaining 23.33% of Sydrogen Energy shares held by Venezio, is due for completion in Nov 2026.
The transaction is subject to the approval of Nanofilm's shareholders.
"The full acquisition represents a significant step in strengthening our position in the hydrogen energy sector," says Shi Xu, executive chairman and group CEO of Nanofilm.
"By making Sydrogen Energy a wholly owned subsidiary, we can better align its activities with our broader corporate strategy and accelerate innovation in sustainable energy solutions," he adds.
Gian Yi-Hsen, CEO of Sydrogen Energy, says that with this transaction, Sydrogen Energy would have greater flexibility to move quickly and capture new opportunities across the hydrogen value chain.
"As a Singapore-headquartered company with strong industrial foundations, Sydrogen Energy is uniquely positioned to serve as a key contributor to Asia’s hydrogen innovation hubs while also serving developments across the globe —capturing opportunities in markets such as China and the Singapore maritime market," he adds.
In its 1QFY2025 business update for the quarter ended March 30, Sydrogen posted a 158% y-o-y growth in revenue, to account for 1% of Nanofilm's total revenue, which is made up mainly by providing coating services to consumer electronics makers.
Nanofilm shares closed at 64 cents on July 4, down 3.79% for the day and down 17.53% year to date.
