Durrant Pate/Contributor

Tropical Battery Company has strategically acquired Rose Electronics Distributing Company (Rose Batteries), based in San Jose, California, in the heart of Silicon Valley.

Founded in 1963, Rose Batteries is a manufacturer of specialised batteries for high-value industries requiring critical power, including healthcare and aerospace. The acquisition was completed through Tropical Battery’s American subsidiary, Tropical Battery USA LLC.

The purchase price is subject to strict non-disclosure restrictions. However, the price significantly exceeds 50 per cent of the market capitalisation of Tropical Battery, a leader in innovative energy solutions in Jamaica.

Diversification strategy

The acquisition of Rose Batteries represents a significant milestone in Tropical Battery’s strategy of diversification into new complementary product lines, market segments and geographies. It also reaffirms the company’s commitment to technological innovation and growth in the global energy market.

The integration of Rose Batteries into Tropical Battery’s group of companies represents much more than simply an expansion into the world’s largest economy, but has been deemed a significant step forward in boosting technological capabilities, innovation potential, and key financial indicators. The acquisition is projected to materially enhance Tropical Battery’s free cash flow, improve its cash conversion cycle, and increase the return on capital, thereby enhancing shareholder value and financial strength.

CEO of Rose Batteries Itamar Frankenthal, an influential shareholder who has led the company since 2016, will join Tropical Battery as a shareholder and board member, continuing his focus on growth opportunities in the United States. A statement from the company says Frankenthal’s extensive experience, shaped by his Harvard MBA journey, along with his transformative leadership at Rose, underscores the expertise and visionary approach he will bring to the Tropical Battery group of companies.

Rose’s COO, Chris Wunderlich, will become the new CEO of Rose Batteries, bringing a blend of experience in management, engineering, operations and technology.

Planned transformation of Tropical Battery

Following the acquisition of Dominican Republic-based KAYA Energy Group in 2023, and now the acquisition of Rose, Tropical Battery will focus on integrating and harmonising these three dynamic subsidiaries to leverage synergies, optimise costs, and explore new growth opportunities across various markets.

Commenting on the acquisition, Tropical Battery Managing Director Alexander Melville stated: “This acquisition reaffirms our commitment to transforming Tropical Battery into a multinational organization at the vanguard of innovative growth in emerging segments driving the transition to more sustainable energy solutions.”

Continuing, he explained: “The integration of Rose Batteries will position the Tropical Battery group of companies to offer even greater value to our customers and stakeholders than ever before. We are reinvigorated by this next chapter in our growth and passionate about enabling a more sustainable, technologically driven future in the energy sector, while strengthening our financial performance with the support of pioneers in the Caribbean financial services ecosystem like Sygnus Capital, which served as lead arranger in this transaction.”

Gregory Samuels, senior vice-president & head of investment banking at Sygnus Capital, said: “Sygnus Capital’s partnership with Tropical Battery for this transformative acquisition reinforces our commitment to delivering innovative solutions that drive the growth of medium-sized businesses throughout the Caribbean. We believe in empowering local companies to acquire overseas assets, thereby boosting our country’s foreign exchange inflows. This move aligns with our focus on impactful and sustainable investments, while also deepening our longstanding relationship with a valued client, namely Tropical Battery’s holding company, Diverze Assets….”