Arsenal Capital Partners’ portfolio company Novolyte Technologies, a manufacturer and supplier of specialty electrolyte materials for lithium ion battery and energy storage applications, has created a joint venture with Foosung, a producer of specialty lithium salts for lithium batteries.
The joint venture platform will create an integrated 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 US-based 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, 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 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 USD30m 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, says: "This is an important strategic step for Novolyte and we are delighted to be partnering with Foosung 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 centres in both North America and Asia and we will now be the first global electrolyte producer that is backward integrated," says Edward Frindt, Novolyte’s chief executive. "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."
Arsenal Capital originally invested in Novolyte Technologies in 2008.
