LGES completes acquisition of NEC Energy Solutions to expand capabilities in ESS value chain

■ LG Energy Solution acquires 100% share of NEC Energy Solutions, a non-automotive lithium-ion battery and system integration business 

■ Purchase strengthens LGES’s ability to deliver fully integrated energy storage systems including installation, maintenance and operations support to enhance product performance

 

SEOUL, February 17, 2022 – LG Energy Solution (LGES; KRX: 373220) announced Tuesday that it has completed the acquisition of NEC Energy Solutions, a grid battery integrator based in the U.S. to expand its Energy Storage System (ESS) business offerings.

The battery manufacturer has fully acquired shares of NEC Energy Solutions from its parent, NEC Corporation (NEC; TSE:6701), headquartered in Japan. With the deal, LGES will newly establish a corporation under a new name, LG Energy Solution Vertech. Inc.

Global demand for standardized, fully integrated storage systems has experienced a significant and sustained growth as such systems reduce both capital equipment and site installation costs. The market is also looking to the world’s leading battery suppliers to expand equipment and service offerings, recognizing that batteries comprise by far the most significant element of an energy storage system.

Following the acquisition and integration of NEC Energy Solutions’ technologies, expertise and experience, LG Energy Solution will be able to offer fully integrated AC and DC storage systems, all supported by operations services customized to meet clients’ needs; such services could include equipment installation, remote monitoring service and scheduled maintenance.

NEC Energy Solutions achieved an average annual growth of 60% since 2018, posting revenues of US $207 million in 2020. The company’s AEROS® control system, its proprietary system-level energy storage software platform is widely recognized within the ESS business, as are its years of experience with multiple global partners.

By securing the battery system integrator’s technology and extensive operational data, LG Energy Solution will have a strong platform to enhance system-level performance and reliability through an improved monitoring and data acquisition system that includes the battery and inverter (Power Conditioning System) as well as related auxiliary systems. These improved services for both current and prospective clients will deliver mutual benefits of best-in-class performing storage systems for clients, and higher sales revenues for LG Energy Solution.

“Through the deal, LG Energy Solution will accelerate its energy storage business and ultimately better provide our clients with a more comprehensive ESS program that meets the growing demand,” said Youngsoo Kwon, CEO of LG Energy Solution. “We are confident we can expand on the ESS business by escalating our competitiveness in terms of quality and ultimately become a leading global player within the industry.”

The prosperity for ESS market looks to continue its steady surge globally. Battery market researcher SNE Research predicts that the global ESS market size will expand by an average of 35% on an annual basis. The ESS industry was at 11GWh in 2019, 20GWh in 2020 and is anticipated to hit 302GWh by 2030.