At a stroke, the company has effectively broadened its product range.
Next-generation battery developer SES AI‘s (SES 21.15%) shares were positively electric on Thursday. On news that the company had completed an important overseas acquisition, its share price climbed almost 22%. That was much greater than the 0.5% increase in the S&P 500 index.
Jolting the market with an update
Before market open that morning, SES AI had announced that its deal to purchase China’s UZ Energy had been completed. The two companies agreed at the end of July to a deal in which the American company would pay roughly $25.5 million, not taking into account a potential earnout adjustment based on financial performance.
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UZ Energy specializes in energy storage systems (ESS), which, as the name implies, are technologies that capture and retain energy for later use. The company’s products are intended for industrial and commercial clients. At the time the acquisition was agreed upon, its deployments had reached over 500 megawatt-hours of storage, SES AI said.
In its press release divulging the news, SES AI quoted founder and CEO Qichao Hu as saying that the deal “accelerates our growth strategy by leveraging UZ’s strong marketing team and hardware platform to expand our market share in the global $300 billion ESS market, especially in the United States.”
Destination: Data centers
One obvious customer demographic for SES AI’s new busness is data centers, which the company said are on course to collectively triple their share of electrical consumption in the U.S. by 2028. Thanks to the proliferation of resource-hungry artificial intelligence technology, the build-out and expansion of data centers has been and will likely continue to be robust.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.