NEW YORK-Seeking to become a dominant player in the emerging lithium-ion polymer battery field, Valence Technology Inc. plans to buy all rights to this technology that now are held by Telcordia Technologies Inc., formerly Bellcore.
Valence, with facilities in Henderson, Nev., and Mallusk, Northern Ireland, will issue 3 million new shares of its common stock to pay for the purchase. Late in the Nasdaq trading day on Nov. 9, the date of the announcement, Valence’s stock had risen to $17.87, up $3.31 per share from the prior day’s closing price.
“Valence will be transforming itself into a licenser of this technology, similar to the Qualcomm licensing model, licensing its technology to battery manufacturers worldwide,” the company said.
“Valence intends to package the acquired technology with its own internally developed lithium-ion polymer battery technology. … Any portable electronic device using lithium-ion technology-and all are projected to do so-will have to pay Valence royalty revenues.”
Because lithium-ions are lighter, smaller, more powerful and more environmentally friendly than competing rechargeables, Valence said projections are that at least 1.89 billion batteries using this technology will be manufactured by 2005.
The transaction, structured as an asset purchase, is subject to Federal Trade Commission approval. Valence said it expects the deal to close by year-end.
Valence itself holds 260 issued and pending U.S. patents, all of which pertain to its lithium-ion polymer battery technology.
Its acquisition from Telcordia, formerly Bellcore, includes 42 U.S. patents, 14 U.S. patents that are pending, at least 200 patents issued or under evaluation by foreign countries and 15 licenses with battery manufacturers throughout the world.
Bellcore’s patented lithium-ion technology, using the brand identification of PLiON, “is recognized as the leading-edge technology in the rapidly emerging field of polymer-based, solid-state batteries,” Valence said.
Lev Dawson, chief executive officer of Valence, said he believes the transaction will benefit battery manufacturers that “have attempted without success to utilize the Bellcore lithium-ion polymer technology.”
“Valence’s unique technology is much lower in cost compared to other manufacturers due to its material, process and cell design.”
Before the acquisition closes, Valence intends to restructure itself into a holding company containing three business units. One will develop licensing and consulting relationships for the PLiON battery design, factory set-up and material fabrication processes. A second will handle the sale of materials and components required for battery cell construction and assembly. The third will focus on strategic market development, including the sale of specialty and next generation lithium-ion batteries.
“We can now manufacture vast quantities of the highest quality specialized electro-active laminated film, which forms the heart of the battery,” Dawson said.
“By maintaining our high level of quality control, the material we produce will enable our licensees to manufacture consistent, efficient and cost-effective batteries, something only Valence Technology has achieved to date using Bellcore technology. … This acquisition will change everything. … Our former competitors will now become our customers.”
