February 23, 2018 / 11:33 AM / a year ago

German battery maker Akasol eyes options including flotation: sources

FRANKFURT/BERLIN (Reuters) - German battery systems maker Akasol is considering financing options, including a flotation on the Frankfurt stock exchange, in anticipation of a surge in demand from makers of electric vehicles, sources close to the matter said.

Akasol, owned by its founders, is being advised by Lazard (LAZ.N) and could also opt to take investors on board instead of going public, the sources said.

“We are currently thinking about our future financing and do not rule out any option,” majority owner and Akasol Managing Director Sven Schulz told Reuters.

Lazard was not immediately available for comment.

According to people familiar with the matter, Lazard has already asked investment banks to pitch for roles in a potential initial public offering (IPO), which could take place later this year.

With regulators slashing emissions limits, the Volkswagen (VOWG_p.DE) “Dieselgate” scandal has energized a shift to electric cars that is necessary to avoid future fines in Europe and to compete in China.

But the high cost of batteries means that electric cars have yet to grow out of their market niche. Only about 870,000 new electric vehicles (EVs) were produced worldwide in 2016, a year when 77.7 million new passenger cars were made.

But efforts by regulators to crack down on combustion engines combined with incentives to make EVs more affordable has sparked massive investment in zero-emissions vehicles, leading industry observers to predict a so-called “tipping point” for demand in about 2025 as battery production costs keep falling while batteries’ driving range grows.

Akasol, founded in 2008, makes battery systems for buses, commercial and industrial vehicles as well as locomotives and ships.

Bus makers Daimler (DAIGn.DE) and Volvo (VOLVb.ST) are among its largest customers. Fast-growing Akasol last year posted roughly 1.5 million euros in earnings before interest and taxes on sales of 16 million euros ($19.7 million).

Germany has seen IPOs of two other battery makers recently. Akasol peer Voltabox (VBX.DE) went public in October, followed shortly thereafter by Varta (VAR1.DE), a maker of micro-batteries for hearing aids and home energy storage systems.

Voltabox raised 150 million euros in its IPO, despite posting only 14.5 million euros in annual sales.

Reporting by Arno Schuetze and Andreas Cremer; Editing by Elaine Hardcastle

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