Atlas Holdings affiliate snaps up Exide Technologies at auction

Atlas Holdings affiliate snaps up Exide Technologies at auction

Atlas Holdings affiliate snaps up Exide Technologies at auction 150 150 Batteries International

July 30, 2020: Exide Technologies has been bought at auction by an unnamed affiliate of the US private investment firm Atlas Holdings, Exide announced on July 23.

The auction was held as part of a court-supervised process to get the company through its third bankruptcy.

The EMEA and Asia-Pacific side of the business will continue as per an earlier agreement, made when the company filed for bankruptcy in May, under which noteholders will maintain continued employment of the firm’s workforce in these regions.

The Atlas Holdings affiliate has paid $178.6 million to take over most of Exide’s business and operations as well as certain liabilities if they are related to the assets acquired. Exide has at least 16 non-performing sites.

In a statement, the company said: “The Agreement contemplates the continued operation of Exide’s transportation, recycling and GNB Industrial Power businesses.”

Tim Vargo, Exide president, chairman and CEO, was brought in to the company in December 2018.

Six months later the company announced it had completed a ‘comprehensive new financing and capitalization’, with $150 million new international notes issued through a new subsidiary, Exide International.

The firm was understood to already be poised to sell off its EMEA/Asia-Pacific business at the time.

As the Covid-19 pandemic hit, Vargo told BESB that Exide was focused on keeping plants running and continuing battery production, but ultimately the virus, the Vernon recycling plant issue and the large portfolio of non-performing assets just proved too costly.

“We are gratified to have generated strong interest in our Americas business and delighted to have reached this agreement with affiliates of Atlas, an investor with significant operational and financial resources and a proven track record of building strong, high-performance organizations,” said Vargo.

“Under new ownership, our Americas business will continue delivering high-quality energy storage solutions and service to our customers, maximizing future growth and profitability.”

Atlas Holdings owns several businesses in industries including automotive, power generation, building materials, food and beverages, packaging, pulp and paper, and metals.

The company has not yet responded to our request for an interview, but in a statement managing partner Jacob Hudson said: “We are very excited about acquiring the assets of Exide’s Americas business.

“We believe that, with a clean start and a strong balance sheet, the Exide Americas business has a very bright future, and we are looking forward to investing in its growth.”

In early July Exide had said it had entered talks for its American business operations to be bought by EX Holdings, a Quexco subsidiary,

In what Exide called a stalking horse bid for the Americas business, the agreement gives the firm a binding bid of around $170 million, along with the assumption of certain liabilities.

Exide is not the only battery firm that has attracted interest from private investment firms. In 2013, investment firm Charlesbank took up a majority stake in Trojan Battery from the Godber family. In the same year Polypore International, the owner of Daramic, sold its stake in Microporous to investment firm Seven Mile Capital Partners for $120 million.

Exide has entered Chapter 11 bankruptcy proceedings three times in its 132-year history. It said the final straw this time came with the Covid-19 pandemic.

The split of the businesses and the sale of its EMEA/APAC operation — news of which Batteries International broke in a special news bulletin a year ago — has been in the pipeline for some time.

The ability to split the firm up was largely the construct of its then CEO Gordon Ulsh in 2005, who took over immediately after its first trip into Chapter 11 bankruptcy. He devised a common nomenclature across the firm’s operations. With that in place it became possible to devise common metrics for performance.