A123Systems, a battery maker that began as a Massachusetts Institute of Technology (MIT)-derived startup eight years ago, has set the terms for its IPO in a new filing with the SEC, proposing to sell 25 million common shares at $8 to $9.50 per share. Individual shareholders expect to sell an additional 680,500 shares.
Even though A123 has not turned a profit as of yet, the company recently garnered a $249 million grant from the Department of Energy in order to implement a plan for setting up commercial manufacturing in the United States.
The company has raised more than $350 million from private investors (including General Electric Co., Qualcomm Inc., Motorola Inc. and North Bridge Venture Partners), and A123’s offering (set by underwriters including Morgan Stanley and Goldman Sachs) would raise between $200 million and $237.5 million in the IPO, up from the $175 million it initially filed to raise in 2008.
Under the grant initiative initiative, A123 has stated that it "will be required to spend up to $1 of our own funds for every incentive dollar we receive." Under a second DOE program – the Advanced Technology Vehicles Manufacturing Initiative – through which A123 hopes to secure $235 million in direct loans, the company would have to spend $1 of its own funds for every $4 it borrows because of cost sharing requirements.
