MONBAT : HAS ACQUIRED TWO LITHIUM ION BATTERY BUSINESSES IN GERMANY AND AIMS TO BECOME ONE OF THE TECHNOLOGY LEADERS IN EUROPE IN THIS HIGH GROWTH MARKET SEGMENT

2017-06-26

MONBAT GROUP HAS ACQUIRED TWO LITHIUM ION BATTERY BUSINESSES IN GERMANY AND AIMS TO BECOME ONE OF THE TECHNOLOGY LEADERS IN EUROPE IN THIS HIGH GROWTH MARKET SEGMENT

Monbat has acquired 100% of all tangible and intangible assets of both Gaia and EAS and has merged both entities into the EAS Batteries GmbH based in Nordhausen. Monbat will be able to capitalise on the existing experience and expertise in the lithium ion field of both merged entities and will focus on upscaling the existing production capacity and commercializing newly developed cell technologies.

This acquisition will bring additional diversification to the Monbat and marks the entry into the lithium ion business which is one of the enabling technologies for the decarbonisation of stationary and mobile energy demands. It further allows a new market presence in the high-power battery systems solutions, based on safe and proven LFP cell chemistry, which is a unique technology approach adopted by only one other big player globally. This technology can address many niche high power applications and meet the very high requirements for reliability and safety, which many applications demand in areas such as aerospace, defence, marine and public transportation.

Monbat is committed to modernise the current premises in Nordhausen, to grow the whole business and to further expand its sales in Germany and neighbouring countries. It plans to invest over EUR 5 million in the next two years into new and modern machinery as well as to expand the workforce. The designated Managing Director of EAS Batteries GmbH, Michael Deutmeyer, commented as follows: 'Monbat brings the financial stability and ability to investment in state-of-the-art manufacturing that EAS needs to become competitive whilst increasing product quality and production capacity. The team at Nordhausen has over twenty years of manufacturing experience in large-format lithium ion cells which is unparalleled in Europe. Monbat has a lot of experience working in highly commoditised markets as well as in mass production of high quality lead acid batteries. Combining these two skill sets is an ideal basis for executing the new business development plan. The EAS team is immensely grateful for this new chance as well as the trust shown in its capabilities and is highly motivated to convert the new investments into commercial success!'

The Chairman and CEO of Monbat, Atanas Bobokov, stated the following: 'This acquisition marks the entry of Monbat into the German market and commitment to a potentially world changing technology. In the last two years, we have analysed many opportunities for further growth of our group but the combination of the former Gaia and EAS companies was unique as was the knowledge of the local team. Monbat will simply do the rights things - we will revitalise and merge these two companies into one complete business from a technology, production, and sales pipeline point of view. We will grow the business and develop new products that will be unique quality wise. We will build new state of the art facilities that will enable us to produce these new products in large quantities for the benefit of all stakeholders. So, 'EAS Batteries' will be a source of power for Monbat too and we are all excited to start working! '

Monbat AD is a Sofia based manufacturer of lead acid batteries and one of the largest companies in Bulgaria. It is listed in the Premium Equities Segment of the Bulgarian Stock Exchange - Sofia with a market capitalisation of approximately EUR 230 million. Monbat was founded in 1959, privatised in 1998 and has since become the largest battery producer in Eastern Europe with production and recycling plants in the three different countries in region. It exports to over 60 countries worldwide and due to its vertically integrated group structure is constantly generating above market-average margins. The consolidated turnover and consolidated EBITDA for the year 2016 amounts to EUR 136 million and EUR 23 million respectively.

GAIA Akkumulatorenwerke GmbH ('Gaia') was set up in 1996 and is one of the leading companies in Germany for the lithium ion technology, specializing in large format cells and batteries. Gaia became known for its ability to deliver high performance customized solutions for a wide range of applications. The company began manufacturing cells and batteries in 2004 for applications that demanded an electrical high-energy or a high-power source. Examples for these often-pioneering projects were the first lithium ion starter battery for Porsche, batteries for the prototypes of a hybrid electric vehicle developed by a German car company, as well as batteries for hybrid trucks and busses for European and American customers. In 2009 Gaia cells were space qualified by NASA and by the Russian space agency. In 2010, the then largest lithium ion battery for marine applications with 1.2 MWh capacity was delivered. Since 1996 more than EUR 60 million were invested into product development and the build-up of manufacturing capacity.

EAS Germany GmbH ('EAS') was formed in 2011 via a Joint Venture between Gaia and Enersys/ Hawker GmbH. The company focused on cell production and technology development on very high quality, large cylindrical and high power cells for hybrid electric drive trains, heavy duty industrials and defence applications.