|FOR IMMEDIATE RELEASE||
Chris Tofalli Public Relations, LLC
+1 914 834 4334
CLEVELAND, OH, September 1, 2010 – Novolyte Technologies, a world leading manufacturer and supplier of specialty electrolyte materials for lithium ion battery and energy storage applications, high performance solvents and other specialty chemicals, today announced that is has signed a definitive agreement with Foosung Co., Ltd., a leading global producer of specialty lithium salts for lithium batteries, to form a new joint venture platform that will create an integrated global producer of lithium battery electrolytes, a key component in the rapidly growing market for lithium batteries used in hybrid electric vehicles and consumer electronics.
The U.S.-based new joint venture entity will retain the Novolyte Technologies name and will be managed by Novolyte's current management team from its existing Cleveland headquarters. Concurrent with the formation of this joint venture, Novolyte will rename its solvents, phosphines, and custom manufacturing businesses Novolyte Performance Materials, LLC, which will be operated separately by Novolyte’s current management team.
The formation of this joint venture is expected to close in the fourth quarter of 2010 once Novolyte completes the separation of its Performance Materials business and Foosung completes the requisite governmental approvals in Korea.
Foosung Co., Ltd. is the sole producer in Korea and one of four global producers of high purity Lithium Hexafluorophosphate (LiPF6), a specialty salt used for electrolyte manufacture. In addition to supplying technology to Novolyte, Foosung will invest approximately $30 million in the joint venture and contribute a future lithium salt plant. Novolyte is contributing its energy storage business to the joint venture.
John Televantos, a Partner at Arsenal Capital, said, “This is an important strategic step for Novolyte and we are delighted to be partnering with Foosung Co. and its leaders. With this venture we feel that Novolyte is now positioned to become the leading global supplier of lithium battery electrolytes, a key performance component in the fast growing market of lithium ion batteries for consumer, automotive and industrial markets.”
“Novolyte is the only electrolyte business with a global manufacturing base having operations and technology centers in both North America and Asia and we will now be the first global electrolyte producer that is backward integrated,” said Edward Frindt, Novolyte’s CEO. “We are excited to be creating this Joint Venture with Foosung which strategically supports our goal of building the leading technology based electrolyte supplier with the most efficient supply chain in order to better serve our customers worldwide.”
Novolyte is the leading producer of primary (non-rechargeable) and secondary (rechargeable) Lithium electrolyte materials in North America, Europe and Greater China and a leading provider of electrolyte and ultracapacitor solutions worldwide. Novolyte serves its global customer base through its manufacturing facilities in Baton Rouge, Louisiana, and Suzhou, China under the Purolyte® brand. Novolyte supports its high-purity formulation capabilities and proprietary technology to offer cost-effective and high-performance electrolyte solutions, from its U.S. and China-based technical centers. The business serves a broad range of end-use products requiring highly functional electrolytes such as consumer electronics, telecommunications, military, medical, aerospace, ultracapacitors, grid storage and electric vehicles.
Novolyte received in 2009 a $20.6 million award in stimulus funds for expansion from the Department of Energy under the Recovery Act - Electric Drive Vehicle Battery and Component Manufacturing Initiative, as well as $1.12 million in Ohio Third Frontier funding in collaboration with the Great Lakes Energy Institute at Case Western Reserve University to develop and commercialize advanced electrolyte materials for next-generation Lithium-ion batteries. Both of these awards will be contributed to the joint venture.
The Lithium ion secondary battery industry can be classified broadly into two major segments, a small sized battery segment for mobile IT including PCs and mobiles and a large & medium sized battery segment for electric vehicles, stationary energy storage system, and intelligent robots. According to a relevant market review, the small sized battery market is estimated to reach $13 billion by 2014 and the large & medium sized battery market for eco-friendly vehicles is presumed to require a battery demand equivalent to about 5 million vehicles by 2015 with an annual growth rate of 20-30%. The lithium-ion battery technology will also become the fastest-growing segment for utility-scale stationary energy storage and it will grow to become a $1.1 billion business worldwide by 2018.
Arsenal Capital Partners originally invested in Novolyte Technologies in 2008. In addition to Novolyte, Arsenal Capital’s current Specialty Chemicals and Materials portfolio includes Velsicol Chemical, a leading global manufacturer of high performance chemicals used in agricultural and industrial applications. Earlier this year in a transaction which returned in excess of 12x invested capital to investors, Arsenal sold Genovique Specialties Corporation, a leading global provider of benzoate plasticizers, to Eastman Chemical Company. “We are pleased with the continued progress within Arsenal Capital’s Specialty Chemicals and Materials practice. Together with management teams we are identifying creative strategies to strengthen our portfolio investments. Novolyte’s development of this joint venture with Foosung greatly enhances their global competitive position,” said Timothy Zappala, a Partner at Arsenal Capital.