Electrovaya (TSX: EFL, Stock Forum) moved toward making the deal of the century today when the company announced plans today to acquire the assets of a state-of-the-art manufacturing plant with a capacity of about 0.5 Gigawatt hours (Gwh) of lithium ion electrodes and other products.
According to the news release, the facility's output, when converted to battery systems, boasts a revenue capacity of up to $250-$550 million.
What makes the deal super sweet is even though the facility was only recently constructed with hundreds of millions invested and tangible assets of over $100 million with a profitable on-going contract to a key customer for annual revenues of ~$30.0 million, the company was able to pick it up for only a tiny fraction of the tangible asset value.
The company's green non-toxic production process will remove toxic NMP at the facility and will allow up to 50% reduction in processing costs as well as about 80% reduction in energy costs while producing higher performing products.
As a result of the deal, the company will also be acquiring an experienced management team to manage operations and growth at the plant.
Electrovaya was in the news recently when the Mississauga, Ontario-based designer, developer and manufacturer of lithium ion batteries announced five days ago that it had received a $1.3 million grant award for lithium ion systems for Toronto Hydro and London Hydro.
Shares climbed 39.53% on the news to $1.20 per share.
Currently there are 75.3m outstanding shares with a market cap of $90.4 million.