Tesla to Acquire Maxwell Technologies for $218 Million

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Tesla moving in so boldly with a full acquisition deal hints at the prospect of a breakthrough in battery technology that has Tesla excited enough to dive in.

Tesla Inc has agreed to buy energy storage company Maxwell Technologies Inc for $218 million in an all-stock deal that could help the electric auto maker produce batteries that hold more energy and last longer at a time when it needs to cut costs and faces growing competition. The valuation hints at a significant breakthrough in battery tech by the company and represents a $218 million stock deal that allows Tesla to convert company stock into new value for the company without draining precious capital.

That application could give Tesla a boost in an increasingly competitive electric vehicle market, the report said.

The technology potentially provides much higher energy density than lithium-ion batteries, with the added benefit of quicker recharge times.

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In a statement announcing the Maxwell Technologies acquisition, Tesla said it's 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. Maxwell claims they can lengthen the life of a battery by up to two times, and function across a broader temperature range.

The purchase price of US$4.75 a share, announced by Maxwell in a statement on Monday, amounts to about a 55 per cent premium to the target's closing price on February 1.

Maxwell also counts General Motors as a customer.

Maxwell shares have fallen steadily from levels around $15, last seen in mid 2014. Maxwell surged as much as 52 percent - a record jump - to the highest since August 1.

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Currently, Japan's Panasonic Corp is the exclusive battery cell supplier for Tesla cars.

In 2011, Elon Musk predicted that supercapacitors, not batteries, will power future electric vehicles (EVs) such as those being produced in massive numbers by his Tesla, Inc.

Tesla also sells power storage, often in conjunction with its solar power business, and ultracapacitors could be used in backup systems for homes and for utility power grids.

The deal is expected to close in the second quarter.

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