Status:  Abandoned

Acquirer:  SDIC Fund Management Co. (China)

Acquired:  Maxwell Technologies, Inc. (US)

Value:  US$46.55 million

Industry: Electronic Component Manufacturing; Battery Manufacturing

UPDATE: On September 20, 2017, Maxwell Technologies, Inc., announced the sale and issuance of US$40 million in Convertible Senior Notes and, in connection with the sale and issuance, the termination of the Stock Purchase Agreement with SDIC Fund Management Co., Ltd., whereby SDIC was to acquire 19.9% of the outstanding interest in Maxwell Technologies for an approximate investment of US$46.6 million. (See Maxwell Technologies, Inc., Form 8-K, Sept. 21, 2017, SEC Filing; see also Maxwell Technologies, Inc., Form 10-Q, Nov. 9, 2017, SEC Filing.) The investment by SDIC was “to be used for strategic developments, including dry battery electrode development, as well as working capital and general corporate purposes.” (Maxwell Technologies, Inc., Form 8-K, Sept. 19, 2017, SEC Filing.) The investment by SDIC was conditioned on clearance by CFIUS, however, “[o]n August 4, 2017, the Company and SDIC Fund mutually agreed to voluntarily withdraw the CFIUS filing.” (Id.) According to an investor presentation, the SDIC agreement was “terminated to enable [the] note offering but strategic partnership discussions will continue” between the parties. (Investor Presentation, id. at Ex-99.1.)

Posted on August 10, 2017

Status: Withdrawn; Refiling Pending

In a recent SEC regulatory filing, Maxwell Technologies, Inc. stated that  it and  China’s SDIC Fund Management Co., Ltd., withdrew their pending CFIUS notification prior to the expiration of the final 45-day investigation period and that the parties intend to refile at a later date.  (See Maxwell Technologies Form 10-Q, Ex-99.1, Aug. 7, 2017, SEC Filing.)  In the SEC filing, Maxwell Technologies disclosed that “[o]n August 4, just prior to the August 7 expiration of the final phase of the CFIUS review process, we withdrew the filing to allow more time for review and discussion with CFIUS. To that end, we are continuing to work with CFIUS, SDIC Fund, and our advisors to address the remaining open information requests before a refiling.”  (Id.)

Posted April 11, 2017

Status: Upcoming/New Filing

On April 10, 2017, Maxwell Technologies, Inc. entered into a stock purchase agreement with SDIC Fund Management Co., Ltd., pursuant to which Maxwell Technologies will issue and sell to SDIC Fund Management Co. approximately 19.9% of common stock for an aggregate purchase price of approximately US$46.55 million.  (See Maxwell Technologies Form 8-K, Apr. 10, 2017, SEC Filing.)  Maxwell Technologies is “a leading developer and manufacturer of capacitive energy storage and power delivery solutions.” (Maxwell Technologies, Press Release, Maxwell Signs $47 Million Strategic Equity Investment Agreement with China’s SDIC Fund Management Co., Maxwell Technologies Form 8-K, Ex-99.1, Apr. 10, 2017, SEC Filing.)  SDIC Fund Management Co. is a private equity fund manager in China with “significant investments in China’s energy storage industry, including top battery companies, major system integrators in the new energy market, as well as leading OEMs in the China auto and grid industries.”  (Id.)  The majority of SDIC Fund Management Co. shareholders are Chinese-state owned entities, including the State Development & Investment Corporation (a Chinese state-owned holding company), China’s National Social Security Fund, and several provincial investment corporations.  (See SDIC Fund Management Co.’s LinkedIn webpage; see also website for State Development & Investment corporation indicating SDIC is a majority shareholder in SDIC Fund Management Co.)  The investment will be used by Maxwell Technologies “for strategic developments, including, notably related to dry battery electrode development, as well as working capital and general corporate purposes.” (Maxwell Technologies Form 8-K, Apr. 10, 2017, SEC Filing.)

The Stock Purchase Agreement calls for a draft Committee on Foreign Investment in the United States (CFIUS) notification to be filed ten business days after signing (i.e., by Apr. 24, 2017), and closing conditions for the investment include clearance by CFIUS.  (See Sections 4.7, 5.1(d), Stock Purchase Agreement, Maxwell Technologies, Form 8-K, Ex-10.1, Apr. 10, 2017, SEC Filing.)  The Stock Purchase Agreement further states that SDIC Fund Management Co. shall not be required accept any mitigation form CFIUS that would “interfere[] with [its] ability to participate as an observer or director on the board of directors of the Company or to exercise the full rights of ownership of the Shares,” or would “be expected to limit (other than nominally) the Company’s growth or expansion into China.”  (Id. at Section 4.7(i), (ii).)  The parties simultaneously executed a Principal Shareholder Agreement, which provides that as long as SDIC Fund Management Co. holds more than 10% it will have the right to nominate one representative for election to the Board of Directors of the Company.  (See Principal Shareholder Agreement, Maxwell Technologies, Form 8-K, Ex-10.2, Apr. 10, 2017, SEC Filing.)