18 February 2022

BDA advises LG Energy Solution on the acquisition of NEC Energy Solutions

Acquired NEC Energy Solutions from NEC Corporation

2022

BDA Partners is pleased to announce that its client, LG Energy Solution (“LG ES”), Korea, has closed the acquisition of NEC Energy Solutions (“NEC ES”), based in the USA, from NEC Corp, Japan. The value of the transaction was not disclosed.

BDA Partners was the exclusive financial advisor to LG ES on the transaction.

NEC ES was established in 2014, by NEC’s acquisition of the ESS (Energy Storage System) SI (system integration) business of A123 Systems, a subsidiary of Wanxiang Group, China. Its well-recognized, proprietary system-level ESS platform, “AEROS”, has built a track record of managing 986 MW of energy storage across 141 projects worldwide. NEC ES sources 70% of its projects from developed markets, notably in North America and Europe. NEC ES was responsible for some of Europe’s largest ESS Projects including Glassenbury in the UK (40MW) and Jardelund in Germany (48MW). NEC ES offers installation & O&M services. Recording a revenue of over US$210m in 2020, NEC ES boasts a robust revenue growth of 60% (3-year CAGR).

LG ES is a Korea-based, world-leading, lithium-ion battery manufacturer, active in automotive, mobility, IT and ESS batteries. Manufacturing battery cells through its best-in-class laminating & stacking, LG ES has secured blue-chip ESS clients in power grids, commercial, residential, and UPS. It is the market leader in the ESS battery industry.

The ESS market is growing fast. Clients have asked battery manufacturers to provide a turnkey to enhance reliability and convenience through a single contract that covers procurement to warranty. LG ES is acquiring NEC ES to respond quickly to the needs of customers and strengthen competitiveness in the market. Further, following the acquisition, LG ES will establish a new corporation – LG Energy Solution Vertech, through which LG ES will expand its offering from battery supply to ESS design/after-sale support, and solidify its leadership in ESS.

Howard Lee, Partner and Head of Seoul at BDA Partners, commented: “We’re happy to facilitate this transaction where conglomerates from two countries, Korea and Japan, have come together to progress an important ESG theme, in the ESS sector. We believe BDA will continue to add value for clients seeking cross-border growth, across Asia and beyond.”

About LG Energy Solution

LG Energy Solution is a global leader delivering advanced lithium-ion batteries for Electric Vehicles (EV), Mobility & IT applications, and Energy Storage Systems (ESS). LG Energy Solution was the fast-growing battery division of LG Chem, carved out in 2020. It is uniquely well positioned for the future eco-friendly energy industry, developing differentiated materials and next-generation batteries. As the only chemical-based battery company in the world, LG Energy Solution leads the global lithium-ion battery market, based on its materials technology, global production capacity, and promising R&D and investment roadmap. LG Energy Solution’s technology has been approved by over 20 global car makers including Ford, GM, and Volkswagen. Today, more than 4.5 million electric vehicles are powered by LG Energy Solution’s batteries. www.lgensol.com/en

About NEC Energy Solutions

NEC ES is based in Westborough, Mass, USA. It was formed by NEC Corporation’s acquisition of the ESS business from A123 Systems in 2014, offers component cells, lead acid replacement batteries, and grid storage solutions. The company’s products are used for telecoms, IT backup, datacenter, medical, lead-acid replacement, security systems, electric mobility, UPS systems, and other industrial applications in North and South America, the EMEA region, and Asia-Pacific. www.neces.com

About NEC Corp

NEC is a $28bn revenues Japanese multinational IT and electronics leader, established in 1898 and headquartered in Tokyo. Before 1982, the company was known as the Nippon Electric Company Ltd. NEC provides IT and network solutions, including cloud computing, AI, IoT platform, and telecoms equipment and software to business enterprises, communications services providers, and government agencies. Despite being one of the largest PC and semiconductor manufacturers through the 1900s, NEC has mostly withdrawn from manufacturing since the beginning of the 21st century, to focus on IT. www.nec.com

About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes. BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese government-owned bank with US$150bn of assets.

US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc., a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc. is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorised and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd. is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com