What happened
Next-generation battery maker Enovix (ENVX 1.82%) did poorly on the stock exchange over the past few trading days. In fact, according to data compiled by S&P Global Market Intelligence, its stock price eroded by more than 19% this week. It seems investors were rather unimpressed by the company's latest acquisition.
So what
On Wednesday, Enovix announced that it had purchased Routejade, a privately held peer in South Korea, in a cash-and-stock deal. Enovix is parting with roughly 6.2 million shares of its common stock, plus $16.5 million in cash, to effect the purchase.
Like its acquirer, Routejade is a battery manufacturer. It is a developer and supplier of lithium-ion batteries that targets the consumer, health, and military segments of the market. More importantly for Enovix's purposes, it holds a patent on encapsulation technology that can be applied to different battery form factors. Enovix said that this will help it to address various customer requirements in this area.
In the press release touting the deal, Enovix CEO Raj Talluri said, "My vision is for Enovix to grow our battery performance metrics at a significantly faster rate than the industry by harnessing the materials agnostic nature of our architecture and this transaction accelerates our ability to execute that plan."
Now what
That $16.5 million plus the approximately $73.3 million value of the common stock being transacted equals a rough total of nearly $90 million. Investors might be thinking that's a rich price to obtain the mentioned Routejade technology.
However, given Enovix's resources, the buy doesn't look too extravagant -- at the end of its most recently reported quarter, the company had over $343 million on its books. Its current common share count, meanwhile, tops 160 million.