Tropical Battery USA, the newly formed subsidiary of Tropical Battery Company Limited, has made its first acquisition.

The company has acquired a manufacturer of specialty batteries in the United States, but the name of the company is being withheld pending further paperwork, Tropical Battery’s Deputy Managing Director Daniel Melville told the
Jamaica Observer.

“The transaction is complete, but due to confidentiality agreements and ongoing finalisation processes, we want to hold on a bit before we go into further details,” he said.

So far, Tropical Battery has only disclosed that the newly acquired company has been in the business of producing batteries for high-value B2B customers for over 64 years. Its business spans several industries, including healthcare and aerospace.

The acquisition has propelled the Kingston, Jamaica-based parent company into new areas of battery manufacturing while solidifying its plans to expand globally. Shareholders responded positively to the news on Monday when the price of Tropical Battery’s stock rose to $2.40, up from $2.36 on Friday. The share price, however, dipped back to $2.36 on Tuesday.

“The acquisition is not just an expansion into the world’s largest economy; it represents a significant advancement in boosting our technological capabilities and innovation potential,” managing director of Tropical Battery Alexander Melville said in a release posted on the Jamaica Stock Exchange.

“It aligns perfectly with our strategy of diversifying into new complementary product lines, market segments, and geographies. We are excited about the possibilities this brings to our company and our stakeholders,” he added.

Tropical Battery is also keeping costs for the transaction close to its chest, but information released by the company suggests that the deal includes an equity component.

A significant shareholder and former leader in the American company will take a stake in Tropical Battery Company and will also join its board.

“We are currently in a phase where specific financial details of the acquisition, including the cost and the nature of its components, remain under confidentiality due to strategic and competitive reasons. As soon as the transaction reaches a stage where sharing this information becomes appropriate and in alignment with regulatory guidelines, we will be more than willing to provide further details,” Daniel said in an emailed response.

Meanwhile, the current chief operating officer of the acquired company will take over as the new chief executive officer or CEO. Tropical Battery said it has no plans to rename the company.

“We believe in leveraging the 60-year-old established brand equity and reputation of the acquired entity to continue delivering exceptional value to our customers and stakeholders,” Daniel continued.

Overall, the acquisition is expected to be a lucrative deal for Tropical Battery US and by extension, Tropical Battery Company Limited.

Tropical Battery US, incorporated late last year, was formed to extend Tropical Battery’s reach into new markets such as the US, Canada and Mexico with products such as the Tropical brake fluids, engine oils and coolants.

Tropical Battery US has an online store on e-commerce giant Amazon. It also has a fulfilment by Amazon (FBA) account, which means that goods ordered through the online store would be packaged and delivered by Amazon.

“We view this as a very cost-effective strategy which allows us, at just a small commission charge, to take advantage of existing infrastructures,” Alexander said last July.

The purchase of the US-based company marks the second acquisition within the group of companies in one year. Last February, Tropical Battery announced the purchase of a 51 per cent stake in Dominican Republic-based KAYA Energy Group. The company heads intend to leverage synergies, optimise costs, and explore new growth opportunities across the businesses.