Promising alternative energy firm Adaptive Materials sold to U.K. company
Lon Horwedel | AnnArbor.com
U.K.-based Ultra Electronics Holdings plc paid $23 million to acquire Pittsfield Township-based Adaptive Materials from its founders, husband-and-wife Michelle Crumm and Aaron Crumm.
A spokeswoman said the company is expected to maintain its 47,000-square-foot operation just off South State Road in Pittsfield, where the company produces fuel cells and employs between 50 and 60 workers.
Michelle Crumm, the company's chief business officer, could not be reached for comment. Michelle and Aaron are expected to stay with the company.
“Adaptive Materials has always been a privately-held company that has grown steadily through its work in the military space,” Michelle said in a statement. “Acquisition at this time by Ultra Electronics made perfect sense. Together, we can continue to invest in broadening the product portfolio to meet a growing demand from a wide range of customers for Adaptive Materials’ fuel cells.”
The company was founded about 10 years ago as an outgrowth of Aaron Crumm's doctoral project at the University of Michigan. The firm makes fuel cell packs that run on standard propane fuel that can be bought at stores throughout the world.
The technology provides an alternative to heavy battery packs and is considered particularly valuable for the military, whose soldiers need lightweight portable power sources to perform operations in the field.
The military has plunged tens of millions of dollars into the company, including more than $10 million in 2010.
Because of the government funding, Adaptive Materials is the rare example of a startup company that never had to seek or accept funding from outside investors. The company never took venture capital funding, so the outcome of the sale is sure to be very lucrative for the Crumms and the employees of the company, who have shares of their own.
Ultra Electronics is a conglomerate with some 24 companies in 100 markets, including defense, energy and security. Its enterprise value, a measure of its market worth, is $234.39 billion, according to Yahoo! Finance.
Adaptive Materials, in a news release, suggested that the deal would provide financing to continue to expand its fuel cell production capacity and pursue more market opportunities, including commercial applications such as the recreational vehicle market.
“Adaptive Materials is an excellent acquisition for Ultra Electronics, adding to the Group’s range of specialist energy solutions,” said Rakesh Sharma, chief operating officer of Ultra, in a statement. “Adaptive Materials has excellent IP, endorsed by its customers, and will benefit from Ultra’s proven abilities in high quality, volume manufacturing as it enters the production phase for its range of fuel cells. I am confident that Adaptive Materials will continue its track record of innovation under Ultra’s ownership.”
Adaptive Materials is currently seeking to hire about 10 engineers, and those jobs will be filled, the company said.
The firm has experienced overwhelming interest in its jobs in the past. When the company announced in early 2010 that it needed to hire nine engineers as soon as possible, the firm received some 7,100 applications.
Adaptive Materials is one of several companies in the Ann Arbor region that have gotten tax relief from the Michigan Economic Development Corp. in recent years. The firm in 2007 received a 7-year, $871,000 tax credit from MEDC's Michigan Economic Growth Authority board based on a promise to add 100 jobs over that period. The firm also received a 12-year, $41,000 tax abatement from Pittsfield Township.
The company also got a $6.27 million low-cost loan in 2006 from MEDC's 21st Century Jobs Fund. That loan was paid off. In early 2010, the firm received $3 million from the MEDC's Centers of Energy Excellence program, and $1.4 million of that has already been distributed to the company.
Whether Ultra Electronics maintains its promise to keep the company in the Ann Arbor area for the long term is sure to be closely watched.
The region is still bruised from the exodus of U-M medical devices startup HandyLab, whose acquirer, New Jersey-based Becton, Dickinson and Co., is eliminating the company's Pittsfield Township office and moving production of its infection-detection device to the East Coast.
But there are other local examples of acquisitions where the company kept its offices here and decided to grow. Network security firm Arbor Networks was sold in 2010 to Plano, Texas-based Tectronix Communications, which has said it plans to add 30 jobs to Arbor's 90-person Ann Arbor office by the end of 2011.
Also, Ann Arbor software firm HealthMedia, sold to Johnson & Johnson in 2008, is still based here and is gradually adding to its staff.