LG Energy Solution has acquired NEC Energy Solutions (NEC ES), the NEC Corporation subsidiary focused on energy storage which announced its exit from the industry last year.
The news was announced in a press release sent this morning to Energy-Storage.news from BDA Partners, an investment banking advisor based in Asia that acted as financial advisor to LG on the deal. Value of the transaction has not been disclosed.
The South Korea-headquartered battery and energy storage system manufacturer takes over the Massachusetts-based energy storage system integration and solutions subsidiary of Japan’s NEC Corporation. NEC formed the business unit through the acquisition of A123 Energy Solutions in 2014 for around US$100 million.
It was revealed to be going out of business in June last year despite having delivered 986MW of battery storage worldwide, making it one of the leading companies in the fast-growing energy storage system integration space. The company had also become well known for its software controls platform, AEROS. Some of NEC ES’ offices have remained open to honour long-term contracts with customers for existing projects, but no new projects were actively sought.
At the time, a Bloomberg article said that a plan to sell off the division had been at an advanced stage but fell through due largely to impacts from the COVID-19 pandemic that had taken hold a few months earlier. Industry sources Energy-Storage.news spoke to that asked not to be named said that a deal had indeed been “very close” as they expressed their shock and in many cases sadness at the departure of the company’s experienced teams from the sector.
Two of NEC ES’ leadership, CEO Steve Fludder and VP of marketing Roger Lin, joined another US-based energy storage company in South Korean ownership, LS Energy Solutions, in October 2020.
LG Energy Solution is among the world’s biggest manufacturers of electric vehicle batteries, as well as serving numerous other sectors including consumer electronics. It also makes its own residential battery energy storage systems and supplies cells and other components to many developers and integrators in the commercial, industrial and grid-scale stationary energy storage industry segments. It has been primarily focused on high energy density nickel manganese cobalt (NMC) battery chemistry.
The deal offers the new owner a potential high level of vertical integration within the energy storage system (ESS) space. BDA Partners said that the NEC ES takeover will enable LG Energy Solution to become a one-stop ESS solution provider, engaged in services from battery installation to full system solutions. It will also seek to expand its presence in the North American ESS market.
Energy-Storage.news has reached out to LG Energy Solution for comment.
The news comes just a few days after LG battery modules used at Moss Landing Energy Storage Facility, the world’s biggest battery storage plant, were reported to have overheated, causing project owner Vistra Energy to take part of the system offline while it figures out what the problem is and how to repair it.
A week or two before that, LG Energy Solution and European power company RWE announced a supply deal for 200MW / 800MWh of LG battery storage equipment to go into two large-scale RWE solar-plus-storage projects in the US.