Tesla and Maxwell Technologies have drafted a proposal that Maxwell executives have agreed to that, if shareholders agree, would result in Tesla acquiring the company in a stock deal. The deal is detailed in a letter from Maxwell and an 8-K Filing with the SEC filed by the company on February 4th, 2019.
Why do we care? Maxwell Technologies is all about batteries, with a specific focus on dry electrode manufacturing technology that it has been pairing with ultracapacitors. Dry electrodes represent a critical step in the journey towards solid-state batteries, while ultracapacitors have long held the promise of ultrafast charging, if a few key challenges can be overcome. 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.
The deal values each share of Maxwell Technologies stock at $4.75, or nearly 50% higher than the ~$3/share price it was hovering at in the weeks before the announcement. 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.
“We are very excited with today’s announcement that Tesla has agreed to acquire Maxwell. Tesla is a well-respected and world-class innovator that shares a common goal of building a more sustainable future,” said Dr. Franz Fink, President and Chief Executive Officer of Maxwell. “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.”
Jumping in with a commitment to purchase Maxwell is an indicator that Tesla sees massive potential with the technology and hints at the future of solid-state batteries that so many have held out as the holy grail of energy storage for so many years. If Tesla can be the first to bring the next generation of battery technology to market, that could allow it to bring higher energy density batteries to customers at a lower cost and at lower weights, all while increasing the speed of charging. Until we hear from Tesla about the acquisition, we will not know for certain, but from what we know, it looks to be an exciting step into the future of battery tech for Tesla.
Tesla does not invest lightly, as can be seen with its acquisition of Grohmann Automation, which gave it a competitive advantage and a way to maximize automation in the Tesla Model 3 production lines to get the car to scale faster. Before being folded into Tesla, Grohmann was serving the entire auto industry. The acquisition allowed Tesla to make a step change improvement in the capability of its manufacturing lines.
This new deal is pending approval of Maxwell Technologies shareholders and, if approved, would close in January 2020 at the latest.