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Tesla charges its batteries with Maxwell
Posted on Tuesday, 05 February 2019 15:58
Tesla is buying US-based storage battery manufacturer Maxwell Technologies for USD 218.00 million.
Under the terms of the all stock deal, the buyer will pay the equivalent of USD 4.75 per share, representing a premium of 54.7 per cent to the target’s close of USD 3.07 on 1st February, the last trading day prior to the announcement.
The transaction is expected to complete in the second quarter of 2019, subject to the usual raft of closing conditions and regulatory approvals, after which time Maxwell will become a wholly-owned subsidiary of Tesla.
According to Reuters, the deal comes as Tesla is looking to lower costs and produce batteries that contain more energy.
Founded in 1965, Maxwell develops and manufactures energy storage products, including batteries and ultracapacitor modules, for automotive, heavy transport, renewable energy and backup power applications.
The target, whose clients include automotive giants such as General Motors and Lamborghini, posted revenue of USD 91.61 million for the nine months ended 30th September 2018, down from USD 99.61 million in the corresponding period of 2017.
Maxwell presented two ultracapacitor subsystems at an exhibition in February; the grid energy storage system and the grid cell pack, both designed to ensure fast-responding and lifetime storage in grids and microgrids.
The target also announced in January that it had developed a dry battery electrode that can double battery life and reduce costs by up to 20.0 per cent compared to wet electrodes.
Craig Irwin, managing director at Roth Capital Partners, told Reuters that the deal is necessary for Tesla to be able to manufacture batteries more cheaply and hold off competitors.
According to Zephyr, the M&A database published by Bureau van Dijk, there were 169 deals targeting storage battery manufacturers announced worldwide in 2018.
Chinese targets featured in the sector’s ten largest deals of the year, the biggest of which took the form of a CNY 5.00 billion (USD 741.31 million) funding round by Farasis Technology.
© Zephus Ltd