Ultralife Corporation Completes Acquisition of Electrochem Solutions, Inc.

Rhea-AI Summary

Ultralife (NASDAQ: ULBI) has completed the acquisition of Electrochem Solutions for $50.0 million in cash from Integer Holdings Based in Raynham, MA, Electrochem specializes in primary lithium metal and ultracapacitor cells and battery packs, serving energy, military, and environmental markets globally. The acquired company generated revenue of $34 million for the trailing twelve months ended September 30, 2024. The transaction was financed through a new Credit and Security Agreement with KeyBank, N.A., M&T Bank, and Community Bank as lenders.

Positive

• Acquisition expands product portfolio and market reach
• Electrochem brings $34 million in annual revenue
• Expected manufacturing cost efficiencies through scale
• Enhanced cross-selling opportunities
• Access to new adjacent markets

Negative

• $50 million cash payment increases debt burden
• New credit agreement adds financial obligations

Insights

Financial Analyst

The $50 million acquisition of Electrochem Solutions marks a significant strategic expansion for Ultralife With Electrochem's $34 million trailing twelve-month revenue, this represents a revenue multiple of approximately 1.47x, suggesting a reasonably priced deal in the battery technology sector. The acquisition strengthens Ultralife's market position in critical applications and military markets while providing meaningful revenue diversification.

The deal's financing through a new Credit Agreement with KeyBank and other lenders indicates strong institutional backing. The acquisition's size is substantial relative to Ultralife's $140 million market cap, making this a transformative transaction that could drive significant operational synergies through manufacturing efficiencies and cross-selling opportunities. The immediate focus on integration and market expansion suggests potential for revenue growth acceleration in 2024-2025.

Market Research Analyst

This acquisition strategically positions Ultralife in high-growth sectors including energy storage and military applications. Electrochem's expertise in primary lithium metal and ultracapacitor technology complements Ultralife's existing portfolio, potentially creating a comprehensive power solutions provider. The deal enhances market reach particularly in environmental, industrial and utility segments - sectors experiencing increased demand due to energy transition initiatives.

The timing aligns with growing market demand for reliable energy storage solutions, especially in critical applications. Integration risks appear manageable given both companies' shared focus on quality and reliability in specialized markets. The combined entity's enhanced scale should improve competitive positioning against larger players in the battery technology space.

NEWARK, N.Y., Nov. 01, 2024 (GLOBE NEWSWIRE) -- Ultralife Corporation (NASDAQ: ULBI) completed its acquisition of all outstanding shares of Electrochem Solutions, Inc. (“Electrochem”) for $50.0 million in cash from Integer Holdings Corporation (NYSE: ITGR) on October 31, 2024.

“I am thrilled to welcome Electrochem to the growing Ultralife Team as another valued member that shares our core values, operating philosophy and strong commitment to both our associates and our long-standing customers. Having achieved our target of closing the acquisition of Electrochem by the end of October, we now look forward to working closely with Khristine Carroll, President – Electrochem, and her experienced team to jointly implement our integration playbook. Together, we will advance our strategy of more fully realizing the operating leverage of our business model through scale and manufacturing cost efficiencies, while creating highly attractive opportunities to drive revenue growth through heightened cross-selling platforms and extending our reach into underserved adjacent markets that demand uncompromised safety, service, reliability and quality. I am confident that with Electrochem we will further increase our value to our customers and significantly strengthen our competitive position in our end markets, ” said Mike Manna, President and Chief Executive Officer.

Based in Raynham, MA and with over forty years of battery technology experience in critical applications, Electrochem designs and manufactures primary lithium metal and ultracapacitor cells and battery packs serving energy, military and various environmental, industrial and utility end markets on a global basis. For the trailing twelve-month period ended September 30, 2024, Electrochem recorded revenue of $34 million.

Ultralife financed the transaction with a new Credit and Security Agreement with KeyBank, N.A. as administrative agent, along with M&T Bank and Community Bank as lenders.

About Ultralife Corporation

Ultralife Corporation serves its markets with products and services ranging from power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem solving, Ultralife serves government/defense and commercial customers across the globe. Headquartered in Newark, New York, the Company's business segments include Battery & Energy Products and Communications Systems. Ultralife has operations in North America, Europe and Asia. For more information, visit www.ultralifecorporation.com.

This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of our new products on a global basis, and disruptions or delays in our supply of raw materials and components due to business conditions, global conflicts, weather or other factors not under our control. The Company cautions investors not to place undue reliance on forward-looking statements, which reflect the Company's analysis only as of today's date. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Ultralife’s financial results is included in Ultralife’s Securities and Exchange Commission (SEC) filings, including the latest Annual Report on Form 10-K.

Company Contact:	Investor Relations Contact:
Ultralife Corporation	LHA
Philip A. Fain	Jody Burfening
(315) 210-6110	(212) 838-3777
pfain@ulbi.com	jburfening@lhai.com

FAQ

How much did Ultralife (ULBI) pay for Electrochem Solutions?

Ultralife paid $50.0 million in cash for Electrochem Solutions.

What was Electrochem Solutions' revenue before the ULBI acquisition?

Electrochem Solutions recorded revenue of $34 million for the trailing twelve-month period ended September 30, 2024.

How did Ultralife (ULBI) finance the Electrochem acquisition?

The acquisition was financed through a new Credit and Security Agreement with KeyBank, N.A., M&T Bank, and Community Bank as lenders.

What products does Electrochem Solutions manufacture?

Electrochem designs and manufactures primary lithium metal and ultracapacitor cells and battery packs for energy, military, and environmental markets.