A123 Systems, the developer and manufacturer of advanced, rechargeable lithium-ion batteries, amended the SEC registration statement for its' long-threatened IPO in late June. The document shows a modest gross profit in the first quarter of 2009 on $23 million in revenue and a net loss of about $18 million for the quarter. The document also shows that it has more than 1,800 employees (!) and over 450,000 square feet of manufacturing facilities worldwide.
A123’s product line ranges from 3.6Wh batteries for portable power applications to larger 65Wh batteries for electric vehicles. The company is also developing multi-megawatt battery systems for utilities that can provide electric grid services including standby reserve capacity and frequency regulation.
Despite the losses, it is reasonable to expect the IPO to come to market in the third quarter or four quarter of this year. It is reasonable given A123’s revenue, the government and industry focus on smart grid, and the pent up demand for a greentech IPO. Though it would be nice if it could show a clear route to profitability.
The SEC document is worth reading for a glimpse into the steep manufacturing costs of lithium-ion batteries and the long list of risk factors including the impact of gas prices as well as their concentration of revenue from a limited number of customers. It also includes a peek at how execs at leading startups are compensated. (In a word, well.)
According to the filing, North Bridge Venture Partners owns 12.5 percent of the firm and GE owns 11.7 percent of A123. CEO David Vieau owns 2.2 percent.
A123's long-threatened IPO has the potential to draw the market’s attention to the energy storage sector. The IPO will also give us a glimpse on how investment banks and institutional investors like underwriters Morgan Stanley, Goldman Sachs, Merrill Lynch and Lazard Capital Markets will value energy storage firms.
A successful public offering could open the floodgates to more greentech IPOs and usher in the dawn of a finance-rich greentech era. Fasten your seat belts.