Nel ASA

M&A Activity • Feb 27, 2017

Nel ASA: Acquires Proton OnSite to create the world's largest electrolyser company and launches private placement

Nel ASA: Acquires Proton OnSite to create the world's largest electrolyser company and launches private placement

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INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES DIRECTLY OR

INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANYOTHER

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UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE

SECURITIES DESCRIBED HEREIN.

Nel ASA: Acquires Proton OnSite to create the world's largest electrolyser

company and launches private placement

(Oslo, 27 February 2017) Nel ASA ("Nel" or the "Company") has entered into a non

-binding term sheet to acquire the Connecticut U.S. based hydrogen technology

company Proton Energy Systems Inc. ("Proton OnSite"). This will create the

world's largest hydrogen electrolyser company with a global footprint. The

purchase price corresponds to an enterprise value of USD 70 million. The

contemplated acquisition will be settled by USD 20 million in cash, and new

shares of Nel paid in equal instalments after 12 months and 24 months at an

agreed share price of NOK 2.72.

Nel will today (27 of February 2017) launch a private placement (the "Private

Placement") by offering up to 65 million new shares in an accelerated

bookbuilding process.

"We are proud to announce the intention to combine Nel and Proton OnSite,

creating the world's largest hydrogen electrolyser company. Proton OnSite is

recognised as the number one provider of PEM electrolysis systems and fully

complements Nel both in terms of technology and market outreach. The combined

entity will be able to offer the full spectre of electrolysers in terms of

capacity and technology. This will give Nel a strong foothold in the U.S. and

other markets beyond our current position. Proton OnSite also has a very

motivated and talented organization, and a solid backlog going into 2017, says

Jon André Løkke, Chief Executive Officer of Nel.

Incorporated in 1996, Proton OnSite has been developed into the largest

manufacturer of on-site hydrogen generators with over 2,600 units installed

worldwide in more than 75 countries. The company offers advanced Proton Exchange

Membrane ("PEM") electrolysis systems to various markets, focusing on small to

medium sized plants. Proton OnSite's recently developed Megawatt product line is

viewed as a significant area of focus and deemed to be a key success criteria

going forward. The company had revenues of USD 27 million in 2016 and is

headquartered in Wallingford, Connecticut, with approximately 90 employees.

"Proton OnSite and Nel is a strong strategic fit, with synergies related to

sales and commercialisation, product portfolio, R&D and best practices across

the combined company. We expect a solid demand also for PEM electrolysers going

forward and will by this acquisition be able to fully complement our product

portfolio. Nel will be a one-stop-shop completely independent of your technology

preference and our combined sales teams will be a global force to recon with,"

says Løkke.

"We look forward to joining forces with Nel, creating the leading hydrogen

electrolyser company globally. We see strong strategic benefits from combining

our technological footprint, and think we can accelerate our combined growth and

benefit from all the exciting opportunities we see ahead of us. There is a

strong cultural fit combining our two organizations, and we are excited to

continue on this journey with Jon and his team", says Robert Friedland,

President & Chief Executive Officer of Proton OnSite.

The term sheet between Nel and Proton OnSite's shareholders is non-binding, and

the contemplated acquisition will be subject to the successful negotiation of a

mutually agreed share purchase agreement. The transaction is expected to be

concluded in the second quarter of 2017 and will be subject to ordinary closing

conditions to be agreed, including the receipt of any public approvals required.

More detailed information about Proton OnSite is included in the attached

presentation.

Carnegie acts as financial advisor to Nel in connection with the contemplated

acquisition.

Nel has retained Arctic Securities and Carnegie (the "Managers") to advise on

and effect the Private Placement of new shares directed towards Norwegian and

international investors.

In the Private Placement, the company is offering up to 65 million new shares,

representing ~9.5% of the outstanding capital in the Company. The price in the

Private Placement will be determined through an accelerated bookbuilding

process.

The net proceeds from the Private Placement will be used to secure funding for

the contemplated acquisition and for general corporate purposes, including

funding strategic growth initiatives within the Company's business.

The bookbuilding period for the Private Placement opens today at 16:30 CET and

closes 28 February 2017 at 08:00 CET. The Managers may, however, at any time

resolve to close or extend the bookbuilding period at its sole discretion and on

short notice. The minimum subscription in the Private Placement has been set to

the number of shares that equals an aggregate purchase price of the NOK

equivalent of EUR 100,000.

The shares allocated will have payment date on or about 2 March 2017 and is

expected to be delivered on or about 6 March 2017. The shares will be tradable

upon the registration of the share capital increase in the Norwegian Register of

Business Enterprises, expected on or about 3 March 2017.

The new shares will be issued based on a Board authorisation granted by the

Company's general meeting held on 20 May 2016. The waiver of the preferential

rights inherent in a private placement is considered necessary to secure

financing for the contemplated acquisition in a timely and cost-efficient

manner, in the interest of all shareholders.

The Board of Directors of the Company will consider to conduct a subsequent

offering directed towards existing shareholders in the Company as of the end of

trading today, 27 February 2017 (and as registered in the VPS as of the end of 1

March 2017) who were not allocated shares in the Private Placement.

ENDS

For additional information, please contact:

Jon André Løkke, CEO, +47 9074 4949

About Proton OnSite| www.protononsite.com

Proton OnSite is a global leader in hydrogen gas solutions. Since 1996, the

company has been developing and applying hydrogen technology in creative and

practical ways that best meet the diverse requirements of its customers. The

advanced Proton Exchange Membrane (PEM) electrolysis systems coupled with the

company's uncompromising attention to excellence and quality, enables Proton

OnSite to deliver, install and support gas generation units on every continent.

About Nel| www.nelhydrogen.com

Nel is a global, dedicated hydrogen company, delivering optimal solutions to

produce, store and distribute hydrogen from renewable energy. We serve

industries, energy and gas companies with leading hydrogen technology. Since its

foundation in 1927, Nel has a proud history of development and continual

improvement of hydrogen plants. Our hydrogen solutions cover the entire value

chain from hydrogen production technologies to manufacturing of hydrogen fueling

stations, providing all fuel cell electric vehicles with the same fast fueling

and long range as conventional vehicles today.

Important information:

The release is not for publication or distribution, in whole or in part directly

or indirectly, in or into Australia, Canada, Japan or the United States

(including its territories and possessions, any state of the United States and

the District of Columbia).

This release is an announcement issued pursuant to legal information

obligations, and is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act. It is issued for information

purposes only, and does not constitute or form part of any offer or solicitation

to purchase or subscribe for securities, in the United States or in any other

jurisdiction. The securities mentioned herein have not been, and will not be,

registered under the United States Securities Act of 1933, as amended (the "US

Securities Act"). The securities may not be offered or sold in the United States

except pursuant to an exemption from the registration requirements of the US

Securities Act. The Company does not intend to register any portion of the

offering of the securities in the United States or to conduct a public offering

of the securities in the United States. Copies of this announcement are not

being made and may not be distributed or sent into Australia, Canada, Japan or

the United States. The issue, exercise, purchase or sale of subscription rights

and the subscription or purchase of shares in the Company are subject to

specific legal or regulatory restrictions in certain jurisdictions. Neither the

Company nor the Manager assumes any responsibility in the event there is a

violation by any person of such restrictions.

The distribution of this release may in certain jurisdictions be restricted by

law. Persons into whose possession this release comes should inform themselves

about and observe any such restrictions. Any failure to comply with these

restrictions may constitute a violation of the securities laws of any such

jurisdiction. The Manager IS acting for the Company and no one else in

connection with the Private Placement and will not be responsible to anyone

other than the Company for providing the protections afforded to their

respective clients or for providing advice in relation to the Private Placement

and/or any other matter referred to in this release.

Forward-looking statements:

This release and any materials distributed in connection with this release may

contain certain forward-looking statements. By their nature, forward-looking

statements involve risk and uncertainty because they reflect the Company's

current expectations and assumptions as to future events and circumstances that

may not prove accurate. A number of material factors could cause actual results

and developments to differ materially from those expressed or implied by these

forward-looking statements.

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act).