As an investor, you’d be pretty happy with an acquisition that caused your revenues to increase 900% within one quarter.
But that is precisely what happened when Canadian company Electrovaya, with the help of investment promotion agency Germany Trade & invest (GTAI), acquired Germany’s Litarion in Kamenz, Saxony. It took only three months for the revenues to increase ninefold.
In Litarion, Electrovaya acquired, in the words of CEO Dr. Sankar Das Gupta: “… the technology and manufacturing capacity to become the world leader in clean Lithium Ion energy storage solutions.” While Tesla is building a gigafactory in Nevada from scratch, Electrovaya’s acquisition was a strategic move in a similar direction, aimed at garnering a leading market share within Europe and starting with Europe’s biggest market: Germany.
“We just bought the largest gigaplant in Europe, which has been providing batteries to electric vehicles in Germany, so not so different from Tesla,” continued Gupta.
If, as Gupta believes, his company has acquired a key producer and researcher in the energy storage systems industry, he will therefore hold the keys to the largest Lithium Ion plant in Europe, producing in an industry which the Boston Consulting Group believes might be worth $400bn in a few decades. Litarion won an EUR 18.5m contract to provide Lithium Ion batteries to the non-automotive space on September 1.
Gupta also holds the keys to an excellent example of a German SME which has built success on dominating a niche. Electrovaya Litarion, as it is now known, is sole supplier of high-performance value-added anodes and cathodes for the soon-operational world’s largest electric ferry. Holder of the prestigious ISO/TS 16949 certification, the company is also the patent holder of a ceramic-coated separator called Separion, which has a tremendous heat tolerance thus making it safer and also extending cycle life. The separator material is useable for a wide variety of battery applications.
“This is just one example of many where a German Mittelstand company becomes a global market leader in a niche and thus becomes a high value-creating investment proposition,” said Stefan Di Bitonto, Senior Manager Investment Consulting at GTAI.
“Germany’s Mittelstand landscape is brimming over with such pioneering companies, while the tremendous R&D funding from the government is a huge aid to both these companies and to those who invest here. ‘Made in Germany’ has been a trademark for a long time, but ‘Invented in Germany’ is fast catching up.”
At the forthcoming Battery Show in Novi, Michigan, GTAI will be on hand to advise potential investors about other German Mittelstand companies presenting a similar proposition to Electrovaya Litarion.
Source: Germany Trade & Invest
Date: Sep 15, 2015