Five years after going into lithium-ion batteries by acquiring EAS, a small German manufacturer, Monbat is now again focusing on its core lead-acid battery business. The Bulgarian group recently signed an agreement to sell Nordhausen-based EAS to Britishvolt, a relatively young but very ambitious company. The deal is valued at 36 million euro. The agreement concerns the sale of Monbat Holding GmbH, which owns the operational structure EAS Batteries, and the asset holding structure Monbat New Power GmbH. In addition to cash payment, Monbat will receive a minority stake in Britishvolt. The size of the stake will be known upon finalization of the deal, which will happen within three months, subject to regulatory clearance.
Since part of the payment will be made in Britishvolt shares, Monbat will remain indirectly involved in the lithium technology. The proceeds from the sale will help it expand its markets in Africa and the Middle East, where it sees growth potential.
Monbat bought EAS in mid-2017. It actually acquired the assets of two companies, Gaia and EAS Germany (a joint venture between Gaia and Enersys/Hawker), which later merged into EAS. Gaia was set up in 1996 to develop lithium-ion technology and started limited production in 2004. Over the years, the company changed several owners before finally going bankrupt.
This is when Monbat appeared, buying the assets from a liquidator. Atanas Bobokov, who controls the company together with his brother Plamen Bobokov, does not specify the price but says it was "so low it verged on absurdity". According to its 2018 financial report, Monbat paid 3.4 million levs (about 1.7 million euro) for the business. In exchange, it got a company with history, patents and a small production facility.
What the new Bulgarian owner did was to change EAS's focus. "We directed our efforts to potential niche markets, where a small production like ours would be viable," Atanas Bobokov explains. Thus the company specialized in powering seagoing vessels - submarines, ships, ferries, as well as mining machines - and two years ago it received a certificate for its EASy Marine battery system. Though the business accounts for 1 to 2% of Monbat's turnover, it has increased over the past few years, topping 6.6 million levs in 2021. For comparison, the group's net revenue totals 373 million levs.
The company also decided to use the production facility in Germany to offer solutions and testing of materials and technologies to other producers. The combination of development services and maritime transport solutions turned out the winning formula. When EAS's new and old patents were added, that attracted the interest of the British buyer.
"The truth is that since its very foundation the company has staked on development and improvement of big cells, which are only now becoming topical," Bobokov said. In the past few years EAS also focused on cylindrical cells. Thanks to the deal, Britishvolt will be able to further develop and commercialize a series of large cylindrical lithium-ion batteries for electric vehicles, as well as increase its footprint in the production of modular batteries for maritime transport.
As part of the payment, Monbat will receive shares in the British company, which will allow it to stay involved with the lithium-ion technology. "We remain part of the market but as Britishvolt shareholders," Bobokov said.
Britishvolt's plans are quite ambitious. Young as it is (it was set up in late 2019), the company is currently building a Gigafactory in North England, which is due to be operational in late 2024; a second factory is planned in Canada. Britishvolt shareholders include Glencore, Scorpio Group and the British government, a bourse listing is also envisaged.
The company aims to become a leader in lithium-ion solutions for electrified transport and energy storage, which involves different technologies. That includes LFP chemistry, which Bobokov says EAS has developed to perfection.
Demand for lithium-ion batteries will stay strong for sure, as the set carbon neutrality goals will require increasing capacity of gigafactories, Bobokov said. Monbat sees potential in the development of hybrid systems that combine the best parameters of lead-acid and lithium-ion batteries.
The company is also interested in energy storage projects in Bulgaria, where it can participate with its lead-acid batteries. To achieve scale, however, it will need the so-called bipolar batteries. Three years ago Monbat bought the technology for their production from U.S.-based Advanced Battery Concept and the batteries are now in pre-serial production. For commercial production, Monbat will have to build additional capacity and is currently considering a couple of locations.
The receipts from the sale of EAS will be used for other investment projects, including the acquisition of lead-acid battery producers. "That is our strength. The technology has its future as part of the circular economy. Its share in Europe will be falling of course, but it will be increasing in Africa and the Middle East," Bobokov said. That is the reason why Monbat recently acquired a majority stake in Tunisia-based Nour, which sells its batteries on these markets. Bobokov does not say if specific acquisition objectives have been already identified but explains: "Our idea is to be better prepared geographically for the reduction in lead-acid battery usage in Europe and for meeting the growing demand in the developing markets."