You may not recognize the name A123 Systems. The company is a manufacturer and designer of batteries and battery packs for the electric vehicle market. A123 Systems may be best known as the battery manufacturer for the Fisker Karma hybrid.
A123 spent over $50 million to replace the battery packs in 640 Karma vehicles when Fisker issued a recall. After shelling out that money, A123 began looking for additional funding to continue operations. That additional funding never materialized and this week the company missed significant payments to its debtors and began talking about bankruptcy or possible restructuring.
A123 Systems has now announced that it has entered into an asset purchase agreement with a company called Johnson Controls. Johnson Controls will purchase the assets of A123's automotive business arm, including all of the automotive technology, products, and customer contracts. The purchase agreement also includes A123 facilities in the Livonia and Romulus, Michigan.
The transaction is valued at $125 million. In addition to gaining the assets and facilities already mentioned, Johnson Controls also gets the cathode powder manufacturing facilities in China and A123's equity interest in Shanghai Advanced Traction Battery Systems. Johnson Controls also intends to license A123 to use certain technologies for its grid, commercial, and government businesses. A123 and all of its US subsidiaries filed voluntary petitions for reorganization under Chapter 11 yesterday to facilitate the transaction.