A123 Systems fka AONEQ

[OPKOHEALTH2022]

Ann Arbor - Navitas Systems LLC plans to bring on board about 40 A123 Systems Inc. employees in southeast Michigan, following its $2.3 million acquisition of the government and research side of the battery maker's business.

Woodbridge, Ill.-based Navitas Systems' was the winning bidder in a December U.S. Bankruptcy Court auction for the government side of A123 Systems' operations. Wanxiang America Corp., a Chinese company, won the majority of A123 Systems' business, including its automotive lithium-ion battery business.

On Tuesday, the Obama administration approved the A123 Systems' sale to Wanxiang, and the companies closed their deals late Tuesday.

"It is truly an investment we see as opportunistic in terms of serving the government and military business and looking at some potential commercialization opportunities that come from it," Navitas Chief Financial Officer Thomas Golab said in a recent interview.

Navitas Systems, which provides large-format energy storage systems or batteries to commercial, industrial and government customers, had been waiting approval from the Committee on Foreign Investment in the U.S. — which looked at whether there were any national security concerns with the sale — to move forward with the purchase, Golab said.

Michigan Democratic Sens. Carl Levin and Debbie Stabenow and members of the House late last year raised concerns that the sale of A123 Systems may pose a threat to national security.

"The original issue with CFIUS was the fact that there was this developmental group that was servicing government contracts," Golab said. "Wanxiang's approach to this was to acquire all assets, excluding these particular pieces. This is really a good fit for us from a history standpoint where we believe our strengths are in terms of not only research and development, but working with military on emerging applications."

Navitas' purchase includes: acquiring an A123 Systems Ann Arbor facility, its employees, plus another 11 engineers from A123's automotive business; patents held by A123 Systems' government unit; an undisclosed value of government contracts; and the ability to source cells and components from A123. Customers include the Department of Defense, Department of Energy and Department of Homeland Security. Navitas also is interested in developing some of the products for the commercial market, Golab said.

The business Navitas is buying dates back to 1994, when it was known as T/J Technologies. It was acquired in 2006 by A123 Systems. The business will be called Navitas Advanced Solutions Group and operate as a subsidiary of Navitas Systems.

The government solutions side of A123's business represents about 5 percent to 7 percent of A123 Systems' revenue, said Les Alexander, general manager of A123 Systems' government solutions group. He said selling the government business to Navitas is the best option for A123 Systems.

"The U.S. government wins on this because now we can focus totally 100 percent focus on our U.S. government, our soldiers and sailors," Alexander said. "We can focus on them delivering high quality products."

Alexander said his group is working on battery solutions for the military. A123 Systems has battery-related government contracts, for example, with the U.S. Army TARDEC in Warren.

Navitas ASG also has ideas for energy storage systems for U.S. Navy ships and energy storage systems that could provide mobile grid power.

Navitas Chairman and Founder Alan ElShafei, who has worked in the battery industry for nearly three decades, said the Ann Arbor group is developing a high-energy lithium ion battery cell, which is targeted to achieve nearly twice the energy density of lithium-ion battery technology on the market today.

"I believe if we offer this technology in this large power format, that's the key differentiator in the market," ElShafei said.

ElShafei wants to double the size of the Ann Arbor operation this year as it looks to grow government contracts and possible commercial applications. He said the company's priorities are to fulfill existing government contracts, focus on profitable sales and introduce new advanced batteries to the government.

A123 Systems, which has about 1,300 employees in Michigan, filed for bankruptcy in October.

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From The Detroit News: http://www.detroitnews.com/article/20130129/AUTO01/301290433#ixzz2JQC3XAGP