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Article from GigaOm.

Chinese auto tech behemoth Wanxiang has won the bidding process in an auction to buy the assets of bankrupt battery maker A123 Systems. On Sunday the companies announced that Wanxiang plans to acquire most of the assets of A123 for $256.6 million. It’s news that could be a bit controversial, given A123 received a $132 million grant from the U.S. government, and could now be owned by a Chinese company.

The winning bid beat out Johnson Control’s bid to acquire A123′s automotive division. Johnson Controls previously had offered to buy the automotive division and two factories for $125 million.

One of the reasons Wanxiang’s offer to buy up A123 had been controversial was because A123 had some U.S. military contracts, which critics didn’t want to see in the hands of a Chinese company. But A123 decided to sell off its government business, including all its U.S. military contracts, to Illinois-based company Navitas Systems, for $2.25 million. Wanxiang acquired the rest of the assets including the grid storage business.

We’ll see if that move silences politician critics like U.S. Sens. John Thune (R-S.D.) and Charles E. Grassley (R-Iowa). The deal still has to be approved by the bankruptcy court as well as the Committee for Foreign Investment in the United States (CIFIUS).

If approved, the future of A123 System’s lithium ion battery tech will fittingly be owned by a Chinese auto giant, as China is increasingly becoming one of the most important markets for electric vehicles. Money from Chinese investors, conglomerates, cities and the government, continues to drive a significant amount of the future of next-generation electric car technology.

The deal also provides a future for A123′s technology, which had a promising beginning, but had suffered a series of setbacks in 2012. Venture-backed A123 held the largest IPO in 2009, raising some $371 million, and was trading at over $20 per share when it started trading. A123 also raised more than $350 million from private investors when it was still a startup.

Yet in recent months, it suffered from manufacturing problems, and also had only a handful of customers for its premium batteries. The company had been losing boat loads of money for years.

The Wanxiang deal still won’t make back enough to cover its debts. A123 says:

Because the total purchase price for A123’s assets would be less than the total amount owed to creditors, the Company does not anticipate any recoveries for its current shareholders and believes its stock to have no value.

Now that the A123 bankruptcy is moving forward, it will be interesting to see what Fisker Automotive, one of A123′s prime customers, will do. Fisker had told the media that it is waiting for the results of the A123 auction before it starts back up assembling its Karma cars.

This isn’t Wanxiang’s first cleantech and clean energy acquisition — it’s actually its fifth in 2012, says the company in a release. Wanxiang has been aggressively acquiring under valued American cleantech and clean energy companies.

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Here is an interesting article on Cleantech/ Greentech IPO´s from Earth2Tech.

“Electric car maker Tesla Motors officially delivered the biggest venture backed IPO of the quarter, raising $226 million, according to numbers out this week from the National Venture Capital Association and Thomson Reuters. What made the public debut different from some of the other venture-backed IPOs that happened this quarter? Well, among a variety of things, last summer Tesla managed to score a coveted $465 million in loans from the Department of Energy.

The link with Uncle Sam likely helped allay investors fears over supporting a risky company that has yet to make a profit and doesn’t plan on making any profits for the next two years. Tesla isn’t the only greentech IPO hopeful backed by the government. In fact, a large number of the greentech companies that have been gunning for the public market, or have recently gone public, have significant government support.

Take lithium ion battery maker A123Systems. The venture-backed company raised $371 million in its public debut in 2009, which was the largest IPO of the year, and represented about a third of the overall IPO market that year in terms of dollars raised. A123 secured a sizable $249 million grant from the Department of Energy last summer.

Before Tesla, the venture-backed greentech IPO hopeful of the hour was solar panel maker Solyndra, which hosted a speech by President Obama in May. Last year the company won a whopping $535 million loan guarantee from the U.S. Department of Energy, and that loan guarantee translated into a loan from the U.S. Treasury. However, despite the government support, investors’ appetites for solar, and Solyndra’s, IPO just wasn’t there and Solyndra ended up ditching its IPO plans last month, in lieu of raising funding from its current investors.

This week, shortly after Tesla’s IPO, an investor behind another venture-backed and government-supported electric car maker suggested it will also one day go public. That would be Fisker Automotive, and Ray Lane, the Kleiner Perkins venture capitalist and former Oracle executive, said this week that “Certainly we would plan to sell shares in the public market once the Karma is on the road and we have visibility into the revenue plan.” In April Fisker closed a $528.7 million loan agreement that will be used to help the startup launch its luxury plug-in hybrid model and set up manufacturing in Delaware for a line of lower-cost plug-in hybrids.

Smart grid company Silver Spring Networks, which has been planning an IPO for the last six months, might not have direct government support, but the close to $4 billion in funds for smart grid projects from the U.S. stimulus package has been a major boon to its utility customers. The Silver Spring folks told me in an email last year that the funding “will go a long way toward accelerating and broadening deployment of the critical smart grid infrastructure.” Silver Spring is working with stimulus award winners Florida Power & Light, Oklahoma Gas and Electric, Sacramento Municipal Utility District, PHI Holdings (including PEPCO, Atlantic City and PEPCO DC) and Modesto Irrigation District.

Other rumored greentech IPO hopefuls (here’s Earth2Tech’s 10 Greentech IPO Picks) that have some sort of government support include solar thermal developer BrightSource Energy and Smith Electric Vehicles. BrightSource received a commitment earlier this year from the Department of Energy for a $1.37 billion loan guarantee to build out BrightSource’s Ivanpah solar project, which is set to be the first new solar thermal power plant built in California’s deserts in 20 years. Smith Electric Vehicles won a $10 million DOE battery grant last summer, and added $22 million under the same program in March.

Of course, not all of the greentech IPO candidates are under the wing of the U.S. government. Biofuel developer Amyris is planning a $100 million IPO without direct government support. But the odds are if you see a greentech startup hit the Nasdaq it’s got Uncle Sam in its corner.

The reality says a couple things about the greentech industry and the IPO market in general. First the IPO market for venture-backed startups is actually relatively weak right now. A significant amount of companies have actually pulled their IPOs in recent weeks and that extra bit of confidence via government support can help push these plans onto the public markets (Solyndra as the exception).

Another issue is that many of the government loans, grants and loan guarantees given to these greentech startups come attached with a cost-sharing requirement over a certain time frame. To unlock the full extent of the government funding companies like Tesla and Solyndra have to raise their own matching funding, by a certain date, and many are turning to the public markets for that.”

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Here is an optimistic article from earth2tech.

“Is 2010 the year of the greentech IPO? Well, a whopping 19 green companies have announced IPOs since September, according to a report from Bloomberg New Energy Finance, and none of those have sold shares yet. And that’s just the companies that have announced that they’ll IPO — not including companies that are widely thought to file and go public this year (like Silver Spring Networks.) In total, greentech companies plan to raise $9.6 billion worldwide in 2010, “more than triple the total value of IPOs for the industry in 2009,” reports Bloomberg New Energy Finance.

Green IPOs were already up slightly last year over 2008, according to the Cleantech Group. That was thanks to lithium-ion battery maker A123Systems’ (a AONE) $371 million IPO in late September (the largest IPO in the U.S. last year) and the massive $2.23 billion IPO of China Longyuan Electric Power Group in the fourth quarter of 2009. But up until A123Systems’ public debut, green IPOs (and most IPOs) were relatively stalled last year.

However, the post-A123Systems boost seems like it already occurred in the fourth quarter of 2009, when there were already 18 green IPOs, totaling $2.9 billion. And the first quarter of 2010 saw a drop in green IPOs to 13, totaling $1.5 billion — China accounted for the majority of transactions, with eight offerings. As the Cleantech Group put it:

[T]he number of high profile companies registering to go public in the U.S. in late 2009 and early 2010 failed to translate into the volume of IPOs that many predicted, with only three North American cleantech IPOs in 1Q 2010.

But the green IPO bonanza that Bloomberg is expecting will specifically be targeted at renewables. The report says 12 of the 19 companies that have announced they will IPO are wind and solar firms. In particular Italian utility Enel SpA plans to sell a minority stake of its renewable energy unit Enel Green Power for $5.4 billion by the end of 2010, Chinese wind turbine maker Xinjiang Goldwind Science & Technology Co. plans to raise $1.5 billion in Hong Kong, British solar energy producer Engyco is looking for $1.4 billion, and Spanish Renovalia Energy SA could be looking for $300 million.”

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Here is some interresting thoughts from CNET.

“With investors getting smarter and start-ups getting bought, the mood is brightening in green tech. But the high-profile companies seeking to go public this year have some industry watchers talking bubbles.

For proof, investors point to the spate of planned initial public offerings, including electric car maker Tesla Motors, solar company Solyndra, and biofuels maker Codexis. Smart-grid company Silver Spring Networks and biofuels maker Amyris are rumored to be on deck.

Long-term trends may favor innovative green companies, as concerns about energy resources and the environment grow. But that doesn’t mean this year’s leading companies can navigate the complex regulatory and financial environment to become successful companies, said Jack Robinson, founder of Winslow Management, which focuses on environmentally oriented public companies.

“Valuations seem to be ahead of themselves,” Robinson said. “Some of the people [in venture-backed green-tech companies] don’t have the history and don’t understand the pitfalls that need to be addressed from a technology, market, regulatory, and political point of view.”

An example of a company he considers highly valued is lithium ion battery maker A123 Systems, which went public last September. In addition to raising $371 million, it raised the hopes of many other young energy companies.

Investor Rob Day of Black Coral Capital did an analysis of four recent IPO filings in the green-tech area and was concerned when he found that their unofficial revenue numbers were far below the amount of money put into them.

Nonetheless, even early misfires don’t mean investors should write off the whole sector. The high-profile companies that have filed to go public aren’t the best indicators of what’s to come as many other companies could raise funding through private equity sources, rather than tapping the public stock market, Day argued.

“My worry is that if these IPOs are perceived later on this year as having been unsuccessful, it’ll once again set back the entire clean tech venture industry, because of the example it sets in terms of lack of (financial) exits,” he wrote.

Netscape moment ahead?
Even with the worries over financial returns for investors, there’s a reason that IPO hopefuls have gotten as far as they have. It’s widely recognized that Tesla Motors and Solyndra, for example, have developed innovative technologies. Tesla’s $109,000 Roadster has become a darling among the well-heeled and its planned Model S sedan, priced at about $57,000 before tax credits, has legions of fans even though it won’t be built for two more years.

Solyndra has developed a solar collector designed specifically for flat commercial rooftops. In its first installations, the company touts how quickly these collectors, which use curved thin-film solar cells, can be installed, which brings down the overall system cost.

As with many green-tech upstarts, though, both companies have big-time challenges. Solyndra and Tesla borrowed hundreds of millions of dollars from the U.S. Department of Energy to build manufacturing facilities and they face powerful competition, in the form of incumbent automakers and low-cost Chinese solar panel producers.”

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I think that we last week saw a start of a new boom, A123 soured on the IPO, and many candidates are waiting in line. Here is piece on the issue from Reuters.

“SAN FRANCISCO, Sept 24 (Reuters) – A 50 percent leap in the shares of lithium-ion battery maker A123 Systems Inc (AONE.O) on their first day of trading looks likely to jumpstart the market for clean-tech share offerings.

The Watertown, Mass.-based A123 Systems is now worth over $1.9 billion, a striking valuation for a company that has yet to make a profit and still needs large-scale commercialization.

Industry executives and experts said A123’s success shows investors have an appetite for green technology companies that lose money, but have tremendous potential.

So the stock’s first day jump, which is the second-best performance for a debut stock in 2009, should encourage more venture capital-backed clean technology companies to go public, they added.

“This is an interesting time for the market because there are several (clean-tech) companies that have been growing very nicely,” said Faysal Sohail, managing director of venture fund CMEA Capital, which is an investor in A123.

Sohail declined to comment specifically on A123, but said the whole environment is creating opportunities for clean-tech companies and expects 2010 to be a busy year for green IPOs.

“They are real companies with substantial revenue and growing at a very fast clip,” he said.

CMEA Capital also backs companies such as Silicon Valley solar manufacturer Solyndra and biofuel company Codexis, which many see as likely candidates for the IPO market.

Other green companies deemed ripe for an IPO include smart grid network company Silver Spring Networks, electric carmaker Tesla Motors and solar thermal company BrightSource Energy.”

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Here is a cleantech story by way of Bnet.

“Hours ahead of battery maker A123 Systems‘ initial public offering, optimism is already running high that the company will crack open a stagnant market and convince investors that they should also buy into other stock offerings.

A123 made an 11th-hour call yesterday to raise the price its opening price by 23 percent, to a range of $10 to $11.50. If the company gets traction it will bring in about $250 million. That’s not bad, for a firm that lost $40.7 million in the first half of the year. Its revenue was only slightly higher, at $42.9 million.

But A123 is well positioned. It started off selling batteries into the power tool market. That led to electric cars — which are not yet common on the road, by any means. The expectation is that electric vehicles will multiply rapidly in coming years; even if they don’t, A123 is also starting to make batteries for utilities, to store excess capacity from solar or wind power farms.

Battery technology also takes a long time to perfect, meaning newer competitors could take years to catch up to A123, offering some stability. So as startups go, it’s a good company to attract attention from the stock markets during a protracted downturn. The question is whether others can follow in A123’s footsteps.

I’d say “yes”, and here’s why: Investors seem to be wising up to what actually works in cleantech. When A123 first filed for an IPO last year, it was in a group of other renewable energy companies, including Imperium Renewables, a biodiesel maker. That company burned through a massive amount of cash very quickly, and is now in no position to have an IPO, or do much of anything else.

Ditto for dozens of other biofuel companies, including corn ethanol busts that did go public, like Verasun and Pacific Ethanol. But, as with the internet boom, all this simply meant that investors were still getting their bearings. It wasn’t yet evident which areas of cleantech would make for the best bets.”

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