FRANKFURT, June 5 (Reuters) - German battery systems maker Akasol is preparing for a Frankfurt stock market listing before the summer break, raising money to invest in new capacity so it can benefit from an expected surge in demand from electric vehicle makers.
The company is planning to sell new shares worth about 100-125 million euros ($117-$147 mln) in a deal valuing it at about 400-500 million euros, people close to the matter said, adding that the listing would likely take place in late June.
Akasol declined to comment on the valuation and timing of the deal.
Car industry experts have predicted a so-called “tipping point” in about 2025 for electric car battery demand following major investments in zero-emissions vehicles and as battery production costs fall and their driving range increases.
Akasol’s majority owner and managing director Sven Schulz told Reuters the proceeds from the initial public offering would be used to double production facilities at its German site Langen by 2020, set up a greenfield factory in the U.S. and build a research and development capacity near its Darmstadt headquarters.
With regulators cutting emissions limits, the Volkswagen “Dieselgate” scandal has accelerated a shift to electric cars that is necessary to avoid future fines in Europe and to compete in China.
But the high cost of batteries means that electric cars have yet to grow beyond their market niche. Only about 870,000 new electric vehicles (EVs) were produced worldwide in 2016, a year when 77.7 million new passenger cars were made.
Akasol, initially set up in 1990 and incorporated in 2008, makes battery systems for buses, commercial and industrial vehicles as well as locomotives and ships. It buys lithium cells and adapts them to systems which are used by bus makers Daimler and Volvo among others.
Akasol is expecting to report roughly 1.5 million euros in earnings before interest and taxes on sales of 22-24 million euros this year, the company said in a statement. Within the next 5 years it is targeting annual sales of about 300 million.
“Our order backlog through 2024 currently stands at 1.45 billion euros,” Schulz said.
Schulz’s family, which currently owns 76 percent of the company, will retain a majority after the listing, he said.
Citi and Commerzbank are managing the deal as global coordinators with Bankhaus Lampe acting as bookrunner and Lazard as IPO adviser.
Two other German battery makers have listed recently.
Akasol’s rival peer Voltabox, which specialises in batteries for lifts, went public in October at an issue price of 24 euros a share. Its shares closed at about 23.32 euros on Monday.
Varta, a maker of micro-batteries for hearing aids and home energy storage systems, also listed in October last year with a price tag of 17.50 euros a share. Its shares ended at 22.68 euros on Monday.
Voltabox raised 150 million euros in its IPO, despite posting only 14.5 million euros in annual sales. ($1 = 0.8552 euros)
Reporting by Arno Schuetze. Editing by Jane Merriman