EnerSys buys TPPL battery maker NorthStar

EnerSys buys TPPL battery maker NorthStar

EnerSys buys TPPL battery maker NorthStar 150 150 Batteries International

October 10, 2019: EnerSys, the international battery manufacturer, has bought competitor NorthStar for $182.5 million, the firm announced on September 19.

It will install a high-speed production line at one of NorthStar’s two factories in Springfield, Missouri, adding $175 million of production capacity with a production rate three times that of existing lines.

NorthStar’s TPPL batteries are close in design and performance to the EnerSys TPPL brand NexSys, which marked a sales milestone on September 30. EnerSys said it had reached 50,000 sold in the US since the batteries were launched there in 2011.

The NexSys range was launched in EMEA under the XFC brand in 2011, then changed to NexSys and sold globally in 2015, the company said.

The EnerSys acquisition means it is the only major company to make TPPL batteries.

David Shaffer, EnerSys president and CEO, said: “In line with our previously disclosed strategy to increase sales of premium products we are excited to announce the acquisition of NorthStar, which will enable EnerSys to dramatically accelerate our sales for TPPL batteries.

“The manufacturing processes and quality standards of NorthStar are very similar to EnerSys TPPL production. It will require a modest capital investment to convert the NorthStar factories to build our battery products over a six-month period.”

The company said the deal would mean $40 million in annual savings could be made by minimizing transoceanic freight because manufacture could be done locally and for longer, meaning more efficient production runs could be made.

“This acquisition combines world-class complementary products and expedites $500 million of TPPL production capacity when combined with the new high-speed TPPL production line and supporting equipment,” the statement said.

“Available floor space at the existing NorthStar facility will accommodate our new high-speed TPPL production line, preserving over $100 million of existing TPPL production capacity.”

EnerSys was founded in 1945 in Sweden and named Svenska Batteri. Three years later Swedish mining and smelting firm Boliden bought the company, only to be sold in 1961 to VARTA Batteri, part of VARTA Industrial Battery.

In 1995 the firm was again sold, this time to BTR, which changed its name to Hawker five years later — and when it merged with EnerSys in 2002, the battery division finally became part of EnerSys.

NorthStar will be a big boost to the company, with its range of thin plate batteries as well as its cooling battery cabinets, tubular plate batteries and ACE system — a wireless battery monitoring system that won the Sally Breidegam Miksiewicz award for innovation at the BCI convention in 2017.

Headed by CEO Hans Liden, the company was set up in 2000 and headquartered in Sweden, with a site in Springfield, Missouri, US. NorthStar installed a 1MWh battery storage facility in Springfield to provide back-up power for the City Utilities grid, using its Blue+ thin plate lead batteries.

Liden, who has been CEO since August 2008, worked for four years at industrial tools and equipment maker Atlas Copco before joining NorthStar. He would not comment about the EnerSys purchase to BESB. EnerSys would only release an official statement.

“With two production facilities in Springfield, NorthStar manufactures and distributes batteries nearest in design and performance to EnerSys TPPL products,” the company said. “The acquired companies generated $157 million in revenue for the 12 months ending August 31, 2019 and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of $14 million.”

Geoffrey May, director of Focus Consulting, was group director of technology at EnerSys between 1991-2000, when the company was known as Hawker Batteries. “I knew that NorthStar was looking for a buyer, but I’m a little bit surprised it’s EnerSys, because there is nothing NorthStar can do that EnerSys can’t do itself — they have product lines that are complementary and they are serving the same markets,” he said.

“It doesn’t improve its product lines because it can do all the same things. It probably doesn’t improve its geographical spread either because EnerSys is bigger and more widely spread.

“I thought North Star would have been sold to someone in the industry who wanted to expand their product lines — and I don’t know who the unsuccessful bidders were. However the fact that EnerSys has taken a competitor in the lead acid industry is interesting for the future of the industry — it shows that they want to continue to expand their business, which can only be good news for the industry.”