U.S. Energy Storage Sector Consolidation

The energy storage sector was surprised by the announcement that C&D Technologies Inc. (C&D) will acquire the Trojan Battery Company. The Trojan Battery Company was founded in 1925 and is headquartered in Santa Fe Springs, California. The Trojan Battery Company is a leading manufacturer of deep-cycle batteries.

C&D manufactures and markets systems for the power conversion and storage of electrical power, including industrial batteries and electronics. C&D was founded in 1906 and is headquartered in Blue Bell, Pennsylvania. C&D is a subsidiary of KPS Capital Partners, a private equity firm that is headquartered in New York, New York. KPS Capital Partners specializes in investments in special situations which includes turnarounds and financial restructurings.

C&D’s acquisition of the Trojan Battery Company will create one of the largest energy storage providers in the world with annual revenues of over U.S. $1.0 billion. The new company will have eight production plant in the United States (California, Georgia, Indiana and Wisconsin), Mexico and the People’s Republic of China (PRC). The new company will also have two research and development centers located in the United States (Georgia) and Ireland.

Why did the Trojan Battery Company agree to be acquired by C&D? The profit margin for Trojan Battery Company has been under pressure due to the increasing price of lead and lower margins due to global competition. KPS Capital Partners specializes in company turnarounds and financial restructuring.

In my opinion, KPS Capital Partners sees the significant, future growth potential in the energy storage sector for renewable energy projects like wind and solar and electric vehicles. The new company should have a stronger balance sheet and be able to be more competitive in the global energy storage sector.

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