Saint-Gobain Invests $80 Million for 50 Percent Stake in SAGE Electrochromics
November 10, 2010
Saint-Gobain Glass in Paris has acquired 50 percent of the equity of the Faribault, Minn.-based SAGE Electrochromics for the large-scale manufacture of electrochromic glass. According to an announcement from SAGE, it is an $80 million investment geared toward mass marketing the dynamic glass product.
Under terms of the agreement, Saint-Gobain will contribute its electrochromic glass intellectual property to SAGE, and all manufacturing and research and development efforts will be merged. SAGE will manufacture the dynamic glass for both companies’ product lines at its facilities in Faribault. The funding from Saint-Gobain will go toward construction of an electrochromic glass manufacturing facility in Faribault. Two senior members of Saint-Gobain’s management team – Jean-Pierre Floris, senior vice president of Compagnie de Saint-Gobain and president of the Innovative Materials Sector, and Francois-Xavier Moser, Saint-Gobain Glass Solutions managing director – will join SAGE’s board of directors.
According to Jim Wilson, chief marketing officer for SAGE, “This is huge. This is the world’s largest building materials company. It has been doing electrochromic research for 15 years, and they have made a decision that their go-forward strategy with regard to electrochromic is a partnership with SAGE.”
Wilson explains that, with the partnership, “All of the future
research and development activities are being merged – Saint-Gobain
will no longer be developing electrochromic glass. SAGE will manufacture
the electrochromic glass for both companies’ product lines
Wilson says talks have been ongoing between the two companies since March 2010. “As you would expect with any type of major partnership like this, we’ve been in discussions with them, at different levels of detail, for a while,” he says.
Wilson calls the partnership a “validation” of SAGE’s work in this technology arena. “[Saint-Gobain] is a very conservative $64 billion company. This is a company that was founded in 1655 … they built some of the most iconic structures in the world and they don’t do anything without a lot of research. This validates the value proposition for electrochromic glass. It validates the potential market for electrochromic glass – a $64 billion company like this is not going to move forward unless they believe the market is huge. But most importantly to us, it validates the clear world leadership position that SAGE has in the technology. They could have partnered with anybody.”
Earlier this year SAGE announced the construction of an electrochromic glass manufacturing facility in Faribault. Part of the funding for the $135 million facility comes from a $72 million loan offered by the Department of Energy (DOE) toward the construction of the 300,000-square-foot manufacturing facility.
“This investment [from Saint-Gobain], alongside the DOE loan, provides the ability to construct that plant,” Wilson says, adding, “we’ve just broken ground on that plant this month.”
The new plant will have an annual production capacity of more than 4 million square feet of electrochromic glass with sizes ranging up to 5 by 10 feet, much larger than currently available in the market. The companies intend to launch the first merged-technology electrochromic product with high-volume shipments beginning in mid-2012.
“Until now, electrochromic glass has been an emerging product, not widely deployed due to cost and manufacturing challenges. This alliance will trigger economies of scale, making possible a new era of high-performance windows that are both eco-friendly and economically sound,” says John Van Dine, SAGE chief executive office. “This alliance will dramatically accelerate global adoption of this game-changing technology in both commercial and residential markets.”
SAGE will remain an independent company and continue to market its SageGlass® products in North America. Saint-Gobain will market SageGlass® under the QUANTUM GLASS™ brand in Europe, which envelopes all of that company’s “electrically enabled glass products,” as Wilson explains. The two companies will work together to develop a marketing strategy for Asia and the rest of the world, leveraging Saint-Gobain’s distribution partnerships.
SAGE and Saint-Gobain also will look to forge partnerships with large strategic players to further accelerate the widespread deployment of electrochromic products.
“There are a number of other major glass and technology players
out there in the world and we think there are options for us to
partner with other major players to really accelerate and move forward
the adoption of this important technology,” Wilson says.
Barclays Capital acted as financial advisor to SAGE in the transaction. Also participating in this investment round was TIAA CREF.
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