Tesla Inc. has agreed to acquire battery-technology company Maxwell Technologies Inc. for about $218 million in stock, as Tesla Chief Executive Elon Musk adds expertise in capacitors that could speed up electric-car charging.
The purchase price of $4.75 a share, announced by San Diego-based Maxwell on Monday, amounts to about a 55% premium to Maxwell’s Feb. 1 closing price. Tesla is always looking for potential acquisitions that support its mission, a spokesman said.
The small acquisition will bring Tesla a short-term energy storage technology that Musk has called a key to the future of electric cars. Maxwell’s lithium-ion capacitors may assist with faster charging capability, said Theo O’Neill, an analyst at Ascendiant Capital Markets.
Maxwell “has struggled for decades to find a way into the automotive market,” O’Neill said in an email. Noting that the company’s shares traded above $40 in 1999 and closed a little over $3 on Friday, he called Monday’s announcement “a great deal for long-suffering Maxwell shareholders.”
Tesla shares dropped as much as 3.3% on Monday morning before recovering; they ended the day up 68 cents, or 0.2%, at $312.89. Maxwell shares surged $1.52, or 49.5% — their biggest one-day jump ever — to $4.59, their highest closing price since July 31.
Tesla’s decision to pay for the small deal in stock underscores the company’s need to conserve cash. The automaker has about $3.7 billion on its balance sheet and has $920 million in convertible bonds that mature March 1.
This is Tesla’s fifth acquisition since 2015. In addition to buying SolarCity Corp., the solar panel installer that was partly owned by Musk and run by his cousins Lyndon and Peter Rive, Tesla has bought small technology and engineering firms to improve its electric cars and manufacturing capabilities.