Tesla has agreed to buy US energy storage company Maxwell Technologies in a deal that values the specialist battery and ultra-capacitor maker at $US218 million, the two companies said on Monday.
The merger, which is expected to be “consummated” in the second quarter of 2019, is the result of an all-stock deal that values each Maxwell share at $US4.75 – a 55 per cent premium to the stock’s closing price on Friday, the companies said.
The acquisition, Tesla’s first in more than a year, is being described by analysts as a “perfect fit” for Elon Musk’s ambitious electric vehicle and battery maker, as well as a low-risk bet on lowering battery costs and boosting battery performance.
Maxwell describes itself as a global leader in the development and manufacture of energy and power delivery solutions, with a product portfolio including its “patented, proprietary and fundamental dry electrode manufacturing technology.”
This technology, says the company, is used to make ultra-capacitors “to create a breakthrough technology that can be applied to the manufacturing of batteries.”
Ultra- or super-capacitors have been creating quite a buzz in energy storage circles for some years now, for their ability to provide quick surges of power and to survive more charge and discharge cycles than a battery.
Indeed, Musk – who at one point was lined up to do a PhD on the technology at Stanford – said back in 2011 that it would be super-capacitors, and not batteries, that would power the electric vehicles of the future.
A couple of years later, however, he changed his tune slightly, suggesting in a Tweet that it was in the category of energy density where a breakthrough was needed for mass market electric vehicles.
@yes_andre I’m a big fan of ultracapacitors. Was going to do my PhD at Stanford on them. But we need a breakthrough in energy density…
— Elon Musk (@elonmusk) May 20, 2013
Clearly, however, the technology is still an area of interest for Musk and his company, and was a motivating factor in the acquisition of Maxwell.
A Tesla spokesperson said on Monday that the company was “always looking for potential acquisitions that make sense for the business and support Tesla’s mission to accelerate the world’s transition to sustainable energy.”
Outside of the company, Bill Selesky, an analyst with Argus Research, said that Maxwel’s proprietary battery technology would will help Tesla give its EVs “greater battery power while taking up less space and lighter weight in the vehicle.”
Garrett Nelson, an analyst with CFRA, said that Maxwell’s dry-electrode technology“could improve battery performance and lower (Tesla’s) production costs meaningfully.
“This seems like a low-risk, bolt-on acquisition for Tesla with significant upside potential, and we also like the fact they’re using stock and not cash to pay for it,” Nelson said in comments quoted by MarketWatch.