As Tesla Motors (NASDAQ: TSLA) seeks to improve their capabilities after a bruising start to 2019, the company announced today that the they had agreed to buy out a major battery technology company in an all-stock deal. Tesla will purchase all 45.9 million shares of Maxwell Technologies (NASDAQ: MXWL) at a price of $4.75 per share in a deal worth $218 million.
Maxwell is a company known for making ultracapacitors, devices that can rapidly store and release energy and is a technology that Elon Musk has been eyeing for his electric cars. Specifically, these components are crucial in regenerative braking systems, which captures a portion of a vehicle’s kinetic energy when it slows down to extend battery life. Musk has hinted in the past that this technology could be a source of technological breakthrough for electric vehicles and at one point tweeting that he had planned to conduct research on ultracapacitors at Stanford University.
“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. “We are 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.”
This acquisition comes as Tesla tries to increase their performance lead over other electric car producers as well as drive down costs to a more viable mass-mark price point. According to The Financial Times, Elon Musk said last week that Tesla already had the “best costs in the world,” and that “our costs are lower than anyone else right now and they’re improving.”
Maxwell Technologies has had previous run-ins with US security regulators, which accused the company’s former executives of fraudulently inflating revenues for investors. At the time, the company settled charges by paying around $3.3 million in fines collectively without admitting or denying guilt in the affair.
In response to the news, shares of Maxwell Technologies surged almost 50 percent. Tesla Motors shares stayed relatively the same, increasing a mere 0.2 percent.
Tesla Company Profile
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles. It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. – Bloomberg
Maxwell Technologies Company Profile
For over 50 years, our world-class research and product development teams have established Maxwell Technologies as a global leader in developing, manufacturing and marketing energy storage and power delivery solutions for automotive, heavy transportation, renewable energy, backup power, wireless communications and industrial and consumer electronics applications. Maxwell products are designed and built to provide performance for the life of the most demanding applications. – Maxwell Technologies