Battery maker A123 Systems files to go public

Boston-area battery upstart A123 Systems on Friday said that it plans to go public and raise $175 million.

The company, which is not profitable, on Friday filed papers in which it said it intends to raise as much as $175 million, based on the registration filing fee. The money will be used to expand it manufacturing and research facilities as well as pay back about $2.5 million in debt.

A123 Systems was spun out of the Massachusetts Institute of Technology seven years ago to commercialize lithium-ion batteries for a range of applications.

The batteries, which the company says last longer and are more powerful than existing lithium-ion batteries, are already being used in power tools. In its S-1 filing, A123 Systems said it anticipates the portable power market to grow from $411 million to $1.1 billion in 2012.

The company sees more potential in the nascent markets of electric transportation and energy storage, according to the filing.

The company has developed batteries for plug-in hybrid cars and acquired Hymotion, which retrofits hybrids with bigger batteries. General Motors is testing A123 Systems batteries for use in its planned plug-in hybrid, the Chevy Volt.

A123 Systems' battery platform is being used for power tools, transportation, and power grid energy storage.

(Credit: Martin LaMonica/CNET News)

Batteries for transportation now represents a $700 million business and can grow to $5 billion by 2012, the company said.

Last month, a company executive indicated for the first time publicly that A123 Systems is also pursuing energy storage on the power grid with a dedicated group.

Energy storage, where devices are used to smooth out short-term fluctuations in the power grid and store wind or solar power, is anticipated to grow from $2.4 billion last year to $3.1 billion in 2015, according to A123 Systems. It also indicated that it is working with utility AES on grid-storage projects.

The company, which will be listed under the "AONE" ticker, made $35 million last year, but it's losses mounted to $31 million last year. In the first three months of this year, it lost almost $14 million.

Bankers for the planned initial public offering will be Morgan Stanley, Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith, as well as Broadpoint Capital and Lazard Capital Markets.

A123 Systems' IPO has been expected and rumored for months.

It will be closely watched by the the clean-tech industry which has seen a huge influx of venture capital into start-ups and a number of public offerings despite a generally poor environment for stock market entrances.

The company was originally funded by a number of corporations including General Electric and the Duracell division of Procter & Gamble, as well as venture capital firms Alliance Capital, Sequoia Capital, North Bridge Venture Partners, CMEA Ventures, and FA Technology Ventures.

Updated at 8:40 a.m. PDT with more financial details from S-1 filing.

[sanenazok]

Cool! Mediocre batteries is what keeps a lot of technologies down. I hope they raise enough to bring more products to market. Hey whatever happened to EEStor?

[mlamonica]

EEStor is still out there. Here's a recent article: http://www.technologyreview.com/Energy/21171/

[jemiller0]

EEStore was supposed to be making super capacitors weren't they? I suspect they are probably just full of it like ZAP. There is a scientist at MIT working on super capacitors also.

[assman]

I will be definitely looking to invest in this company. I've been highly interested in their operations the past year and I think they will revolutionize the battery industry, especially with cars and portable devices. Their technology is incredibly promising and impressive. This will be a stock to watch.

[benjaminstraight]

Ready to dump money in.

[laptopbattery]

The company was originally funded http://www.batteryfast.com by a number of corporations including General Electric and the Duracell division of Procter & Gamble, as well as venture capital firms Alliance Capital, Sequoia Capital, North Bridge Venture Partners, CMEA Ventures, and FA Technology Ventures.

[rhodri876]

This looks very promising

http://www.lightingandfans.co.uk

[tipoo_]

Who chose that name for the company?

?Huh, lots of battery company names are taken??
?Uhh, what about battech??
?No no, that sounds like we make batmans stuff??
?Oh?Ok, how about A123 Systems??
?GREAT!!!?

Followed by the guys at GM:

?We need a good battery for the Volt??
?Hey, A123Systems is first in the phone book, they MUST be good!?
?GREAT!?

[pktxx2008]

The company sees more potential in the nascent markets of electric transportation and energy storage, according to the filing.
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[pktxx2008]

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^-^