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.More news: Super Bowl: Commentary compares woeful offence to Black Caps
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.More news: British TV host Piers Morgan mocks Meghan Markle live on air
Currently, Japan's Panasonic Corp is the exclusive battery cell supplier for Tesla cars.
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.More news: New Avengers: Endgame teaser trailer debuts during Super Bowl 2019