Elon Musk-led Tesla agreed on Monday to buy a maker of battery technologies in an all stock deal, as the maker of the Model 3 seeks to bolster its electric capabilities after a bruising start to the year.
The company clinched a $218m deal to take over Maxwell Technologies, a California-based developer of electric batteries that has counted Volvo-owner Geely, Lamborghini and General Motors among its customers.
Maxwell is a maker of ultracapacitors, which can be integrated into regenerative braking systems and used to help lengthen the life of a vehicle’s existing battery for start-stop engine technology. The company also makes power storage systems for electric utilities.
The takeover comes at a testing time for Tesla, as the company accelerates the production of its lower cost Model 3 and tries to move past a scandal last year that saw the Securities and Exchange Commission force Mr Musk to give up his role as chairman of the automaker. Tesla shares have been volatile to start the year, as investors balance an improving balance sheet with news the company’s chief financial officer Deepak Ahuja would step down.
Maxwell fine
The deal comes less than a year since US securities regulators charged Maxwell and one of its former sales executives with fraudulently inflating the company’s revenues. Maxwell and the executive settled the charges by paying $2.8m and $500,000 in fines respectively, without admitting or denying guilt.
The fine was the second time the company had settled charges with US regulators, having been charged in 2011 with repeatedly paying bribes to government officials in China. It also settled those charges with a fine and did not admit or deny the charges.
The sale of Maxwell was approved unanimously by the company’s board of directors, who expect the deal to be completed in the second quarter of 2019. Maxwell Technologies stockholders will receive fractional shares in Tesla worth $4.75 for each share of Maxwell they currently hold, a 55 per cent premium to Friday’s closing price.
“We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla’s mission of accelerating the advent of sustainable transport and energy,” said Franz Fink, the chief executive of Maxwell. - Copyright The Financial Times Limited 2019