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Velan Inc. Acquires 70% of ABV Energy S.p.A., an Italian Valve Manufacturer

Velan Inc., a leading manufacturer of industrial valves, reports that it has acquired 70% ownership of ABV Energy S.p.A., an Italian manufacturer of engineered valves, actuators and control systems supplied to energy markets. The Marianetti family will retain 30% ownership and Luca Marianetti will continue to be the President and CEO of the company, which will now be named Velan ABV S.p.A. Terms of the transaction, which is being funded out of the cash resources of Velan, were not disclosed.

For the fiscal year ended December 31st, 2010, ABV had sales of € 36.4 million (US$ 52.3 million)and employed 118 people. ABV manufactures valves to API6D and 6A standards and their product line includes pipeline ball valves, emergency shut-down valves, high integrity pressure protection systems (HIPPS), subsea ball valves, control ball valves, diverter valves, modular double block and bleed valves, slab gate valves, choke valves, and nozzle check valves. The company also manufactures its own line of pneumatic and hydraulic actuators, including gas-over-oil actuators. ABV is currently expanding its manufacturing facilities by an additional 5,000 m². This expansion also includes an investment to add machinery as well as other equipment to improve the layout and production flow of the assembly and test facility.

Tom Velan, President and CEO of Velan Inc., said:

“This strategic acquisition is a great opportunity for Velan. ABV has an excellent range of products that is entirely complementary to our valve range and broadens the scope of our offering to the energy markets. We can help ABV realize the global market potential for these specialized valves and actuators. I am looking forward to working with Luca Marianetti and his team to grow the business.”

Luca Marianetti, President and CEO of Velan ABV S.p.A., said:

“I am proud to be a partner with Velan, a company I have known and respected since I started in the valve business. ABV has been successful at developing new products for service in tough applications. Now with our expanded manufacturing capacity and our partnership with Velan, we will be in a strong position to increase the global market share for our product range.”

About Velan

Velan Inc. (www.velan.com) is a world-leading manufacturer of industrial valves with sales of Cnd.
$466 million in its last reported fiscal year. The company employs over 1,700 people and has
manufacturing plants in eight countries. Velan Inc. is a public company with its shares listed on the
Toronto Stock Exchange under the symbol VLN.

About ABV Energy

ABV Energy S.p.A. (www.abvenergy.com) is a manufacturer of specialized valves, actuators and
control systems and had sales of € 36.4 million in its last fiscal year. The company employs
approximately 120 people and has two manufacturing plants in Lucca, Italy.

Except for historical information provided herein, this press release may contain information and
statements of a forward-looking nature concerning the future performance of the Company. These
statements are based on suppositions and uncertainties as well as on management’s best possible
evaluation of future events.

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