Deal Brings Broader, More Diverse Capacity to Produce Advanced Power Systems for Next Generation of Electric Vehicles
NEW YORK, Oct. 16 /PRNewswire-FirstCall/ -- Ener1, Inc. (Amex: HEV)
announced today it has agreed to acquire an 83% interest in Enertech
International, one of South Korea's leading lithium-ion battery cell
producers. The purchase follows the recent announcement of the company's
plans to expand the manufacturing capacity of its lithium-ion automotive
battery subsidiary, EnerDel, based in Indiana. The acquisition is intended to
both broaden and expand Ener1's production capabilities at a time when
automakers worldwide are preparing to launch a new generation of hybrid and
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"Enertech is one of the largest lithium-ion battery producers in Korea,
behind only LG Chemical and Samsung," said Ener1 CEO Charles Gassenheimer.
"This acquisition gives us immediate scale and volume manufacturing ability,
as well as an important beachhead for supplying Asian car makers that plan to
use lithium-ion technology in their electric drive vehicles."
Gassenheimer believes the acquisition will provide immediate synergies,
and add valuable expertise from Enertech's highly respected engineering team
to help accelerate expansion of the Indiana plant.
"This is a unique opportunity for Ener1 to meet the rapidly growing demand
for lithium-ion technology from automakers worldwide by securing a
fully-operational production facility on terms that strengthen our balance
sheet and enhance our position in the industry," Gassenheimer said. "Based
on the terms of this transaction, shareholders equity is set to increase by
approximately $45 million."
Enertech is one of just a handful of companies that specializes in
producing large format flat (or "prismatic") cells, which Ener1 believes offer
significant performance and manufacturing advantages over more common
cylindrical designs. The company operates a 200,000-square-foot,
state-of-the-art plant outside Seoul capable of producing cells for 15,000
electric vehicle battery packs per year. Enertech has also worked with EnerDel
to supply cells for prototype and preproduction systems for Think Global.
Enertech was formerly part of the Saehan Group, which was spun out of the
Samsung Group. Additional details include:
-- The 200,000-square-foot plant in Chungbuk, Korea is capable of
producing cells for 15,000 battery packs per year, which equates to
approximately $125 million of annual revenue based on the current wholesale
price of cells; the physical plant can be expanded to up to $250 million of
revenues with additional capital expenditure
-- 2007 revenues $60.9 million, 2007 EBITDA $7.2 million
-- Sixteen Korean patents, four overseas patents, including a U.S. and
worldwide patent for Enertech's stack winding manufacturing method
-- Manufacturing facility is ISO9001 and TL9000 certified
-- Sales offices in Seoul, Taiwan, Ireland and Hackensack, New Jersey
-- 289 employees worldwide
-- Produces 22 million lithium-ion cells annually for the cell phone,
laptop and PDA markets. Customers include LG, Samsung and Motorola
Ener1 will acquire the 83% equity stake in Enertech for 5 million shares
of Ener1, Inc. common stock, 2.56 million warrants and $600,000 in cash. The
warrants will have a two-year maturity and will be exercisable into shares of
Ener1 stock at a strike price of $7.50.
Ener1 believes it is the first company to produce automotive lithium-ion
batteries in the U.S., and that the acquisition of Enertech will strengthen
its domestic growth plans. In August, the company announced a major expansion
at its two Indiana facilities and plans to break ground on a third plant.
In August, Ener1 took full ownership of its EnerDel subsidiary by
purchasing a 19.5-percent stake held by Delphi Automotive. The company
recently received the prestigious R&D 100 award for excellence in its
technology and uniquely innovative design. The award is shared by EnerDel and
its research partners at Argonne National Laboratory. EnerDel is also an
active participant in the United States Advanced Battery Consortium, which
works closely with Detroit automakers, component companies and others to
accelerate the commercial development of new automotive battery technology.
Management will host an investor call on Thursday, October 16, at 11:00am
Eastern Daylight Time to discuss the Enertech acquisition. To participate in
the conference call, please dial 1-866-578-5784 from within the United States,
or 617-213-8056 from outside the United States. The participant pass code is
89927718. A live webcast of management's presentation will be available on
the Ener1 website, and may be accessed directly at http://tinyurl.com/5395he .
A replay of the presentation will be available from 1:00pm on Thursday,
October 16, on the Ener1 website at http://www.ener1.com
Safe Harbor Statement:
Certain statements made in this press release constitute forward-looking
statements that are based on management's expectations, estimates, projections
and assumptions. Words such as "expects," "anticipates," "plans," "believes,"
"scheduled," "estimates" and variations of these words and similar expressions
are intended to identify forward-looking statements. Forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. These statements are not
guarantees of future performance and involve certain risks and uncertainties,
which are difficult to predict. Therefore, actual future results and trends
may differ materially from what is forecast in forward-looking statements due
to a variety of factors. All forward-looking statements speak only as of the
date of this press release and the company does not undertake any obligation
to update or publicly release any revisions to forward-looking statements to
reflect events, circumstances or changes in expectations after the date of
this press release.
About Ener1, Inc.:
Ener1 develops and manufactures compact, high performance lithium-ion
batteries to power the next generation of hybrid and electric vehicles. The
publicly traded company (Amex: HEV - News) is led by an experienced team of
engineers and energy system experts at its EnerDel subsidiary located in
Indiana. EnerDel has developed proprietary battery systems based on technology
originally pioneered with the assistance of the Argonne National Lab.
Ener1 is seeking to become the first company to mass-produce a
cost-competitive lithium-ion battery for hybrid and electric vehicles. Demand
for battery solutions is being driven by a need to reduce dependence on oil as
well as growing concern about vehicle emissions. In addition to the automobile
market, applications for Ener1 lithium-ion battery technology include medical,
military, aerospace, electric utility and other growing markets.
Major shareholders of Ener1 include Ener1 Group, Inc., a privately held,
global investment and advisory firm, and ITOCHU Corporation, a Japanese
trading company and distributor of manufacturing equipment essential to
lithium-ion battery production. ITOCHU has annual revenue of approximately $90
billion and offices in more than 80 countries. Ener1 has also received funding
from a growing number of institutional investors.
In addition to battery technology, Ener1 develops commercial fuel cell
products through its EnerFuel subsidiary and nanotechnology-based materials
and manufacturing processes for batteries and other applications through its
Contacts: INVESTOR RELATIONS MEDIA RELATIONS
Rachel Carroll Jon Coifman
VP Corporate Communications Waggener Edstrom Worldwide
P: 212 920 3500 P: 212 551 4815
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SOURCE Ener1, Inc.