Austrian firm positions itself to buy Aquion Energy at auction for $2.8M

Aquion Energy Inc., the Lawrenceville-based saltwater battery manufacturer and clean tech darling, will be sold at an auction next Tuesday.

An Austrian battery firm, BlueSky Energy, has submitted a so-called stalking horse bid of $2.8 million. If anyone else is interested, the rival bidder will have to pony up $3 million, with bids due Friday. Everything is up for sale — the intellectual property, which includes dozens of current and pending patents; manufacturing equipment; and inventory.

Suzanne Roski, Aquion’s chief restructuring officer, said the company is anticipating other bids.

“We’ve received quite a bit of interest,” she said.

As many as 39 entities showed interest, according to documents filed in U.S. Bankruptcy Court of the District of Delaware, and 33 of those signed a nondisclosure agreement in order to get a peek at the company’s books. Nine came to see the goods in person.

The group of potential buyers includes Aquion’s resellers, other manufacturers, energy companies and private equity firms. Most are based outside the U.S., the company said, with interest coming from Asia, the South Pacific and Europe.

BlueSky is already familiar with Aquion -— it is a reseller, according to its website.

The Austrian company, which put down a $280,000 deposit in April, did not respond to a request for comment.

Aquion has $27 million in liabilities and less than $8 million in assets.

Ms. Roski said the company “has not completed its analysis of how the sale proceeds would be distributed.”

Aquion, founded in 2008 by Carnegie Mellon University professor Jay Whitacre, was spun out to commercialize his innovation: a battery that uses salt water instead of heavy metals.

The current standard is lead-acid or lithium ion batteries, both of which have environmental drawbacks.

Almost immediately, Aquion became a tech darling. It envisioned big things on both global and local scales — an environmentally friendly battery, manufactured in southwestern Pennsylvania with hundreds of jobs — and backed it up with several rounds of venture capital infusions. Kleiner Perkins Caufield & Byers, a legendary Silicon Valley venture capital firm was an early funder. Bill Gates joined the ranks. In total, the company raised $180 million in equity, documents show. It also gained recognition in clean tech rankings.

In 2012, with much fanfare and a sizable subsidy from the commonwealth of Pennsylvania, Aquion moved into the former Sony Corp. manufacturing plant in Mount Pleasant. It made its first commercial deliveries in 2014, with clients scattered across the globe.

Last year, Aquion’s revenue was above $10 million, but its losses were at three to four times that in the past two years.

Aquion said “its tenuous financial condition has impeded its ability to raise sufficient additional capital on terms that will enable (the company) to continue operations,” documents state, describing its cash-burn as “unsustainable.”

In October, it hired a financial firm to orchestrate either a sale or another round of raising capital, but even a management-led effort the following month didn’t suffice.

The bankruptcy filing took many employees by surprise. Some have filed a lawsuit against Aquion for not giving proper notice under U.S. labor laws.

Distributors, like Ben Zook, who owns Belmont Solar in Lancaster County, were similarly caught off guard by the announcement.

Belmont has been selling Aquion batteries since 2015, and Mr. Zook remains impressed with the product, although most of his customers opt for lead-acid batteries to store the energy from their solar arrays because they are two to three times cheaper.

Also, Aquion’s products take up considerably more space, he said.

But their lifespan — promised at four times that of a lead-acid battery — and their environmental attributes makes them a “premium battery,” he said.

Mr. Zook, who believes he is Aquion’s only Pennsylvania distributor, is sorry to see the company go.

“Overall, they tried hard,” he said.”They set big goals. They put a lot of people in place to do that. With that went a lot of expenditures.

“And the name recognition and the volume that they were hoping to get,” he said, didn’t come quickly enough.

Anya Litvak: or 412-263-1455.

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