IdaTech

www.idatech.com TICKER: IDA     EXCHANGE: Delisted

IdaTech is a US-based company with proprietary reformer technology engaged in the development and manufacture of clean and reliable PEM (polymer electrolyte membrane) fuel cell products for telecommunications and other critical applications. IdaTech is building a strong position in the telecommunications market for back-up power generators and prime power. Technology and product development has resulted in the current transition to commercial, higher margin products. IdaTech's purchase of Plug Power's LPG off-grid product line in October 2010 bolted on a US$1bn market opportunity. In addition to being able to access the estimated US$1bn for off-grid power generation for telecoms through its iGen LPG product, it can also address the significant off-grid non-telecom markets.

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Positively charged
Published: Mar 29 2011

IdaTech is a US-based global leader in the development and manufacture of clean and reliable PEM fuel cell products for telecommunications and other critical applications

It is building a strong position in the telecommunications market for back-up power and prime power. Technology and product development has resulted in the current transition to commercial, higher margin products

The main markets addressed are for the base stations used by wireless telecoms companies in regions with unreliable electrical grids, and for off-grid locations. The ability to provide reliable, cost-effective prime-power would be key to the roll-out of networks in South Africa, Asia, India, and other regions.

IdaTech's purchase of Plug Power's LPG off-grid product line in October 2010 bolted on a US$1bn market opportunity. In addition to being able to access the estimated US$1bn for off-grid power generation for telecoms through its iGen LPG product, as well as any off-grid non-telecom markets.

The Path to Profitability Strategy now has significant foundations, and the continued margin enhancement and anticipated volume ramp-up should lead to increasing profitability.

We forecast a further three years before profitability is reached. Investec, the majority shareholder (69.3%) has been robustly supportive. However, with 2010 year end net debt of US$60m having been extended by Investec, IdaTech is seeking to restructure its balance sheet well before maturity of the Investec debt in March 2012.

Assuming a successful refinancing and continued execution of its strategic plan, we would value IdaTech at £60m, or 117p per share, nearly twice its current price

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