Tesla is paying a hefty premium to acquire energy technology company Maxwell Technologies.
The electric car maker plans to acquire Maxwell Technologies for $4.75 a share, representing a 55% premium on the company’s $3.07 stock price on Friday. The deal values Maxwell Technologies at $218 million.
Tesla’s acquisition appears to be an attempt by the company to improve its energy technology. Maxwell has been developing patented dry electrode technologies that can be used to create ultracapacitors that store large amounts of electrical charge without losing energy. Industry watchers believe ultracapacitors could prove to be safer and more reliable alternatives to today’s batteries. The company currently offers its products in a range of industries, including industrial electronics, transportation, and renewable energy.
In a statement, Maxwell Technologies CEO Dr. Franz Fink said that he believes the deal is in the best interests of his company. He added that Tesla shares a common goal with Maxwell Technologies to build “a more sustainable future.”
A Tesla spokesperson told Fortune in an e-mailed statement that the company is “always looking for potential acquisitions that make sense for the business and support Tesla’s mission to accelerate the world’s transition to sustainable energy.”
The companies expect the deal to close in the second quarter of the year, pending customary closing conditions. Maxwell’s shares (MXWL) are up more than 52% to $4.67 in pre-market trading. Tesla’s shares (TSLA) are down 46 cents to $311.75.