Private equity in talks with UK's BMI for EV battery exposure

LONDON (Reuters) - Private equity funds are seeking a minority stake in information provider Benchmark Mineral Intelligence (BMI), aiming to gain exposure to the electric-vehicle battery supply chain, two sources with direct knowledge of the matter said.

UK-based Hg Capital and Bowmark Capital are two of several private equity firms seeking to buy a stake of up to 20% in Benchmark, which the sources says is valued in excess of 200 million pounds. The sources did not name other firms looking to buy a stake.

Bowmark said it doesn't comment on market rumours and Benchmark and Hg Capital declined to comment.

The sources would not say how the valuation was made, but they did say the process of selling a stake was being run by corporate advisory firm Cardean Bell, which declined to comment.

Interest in battery materials such as lithium, nickel, cobalt and graphite covered by Benchmark has been rising in recent years and is expected to grow at a faster pace as the energy transition from fossil fuels picks up pace and sales of electric vehicles accelerate.

"BMI doesn't just provide price assessments, it also provides detailed information about costs of production in the supply chain, cathode and anode manufacturers and battery makers," one of the sources with direct knowledge said.

"The lithium-ion battery and electric vehicle supply chain is growing at 25% a year," the source said, adding that the demand for information about the sector was growing alongside.

BMI sets reference and benchmark prices for the lithium industry, in which Elon Musk recently said "Tesla might actually have to get into the mining & refining directly at scale."

Subscription based Benchmark was started by Simon Moores in 2017. The company is expecting to employ more than 100 people by next year, the source said.

In its coverage of battery materials and related supply chains, Benchmark now rivals price reporting agencies such as Fastmarkets and Platts and consultants CRU and Wood Mackenzie.

"Benchmark is seen by the private equity funds as an investment for the electric vehicle revolution," the second source with direct knowledge said. "It is an ESG investment (environment, social and governance)."

Growth in the electric vehicle sector can be seen in forecasts for supplies of lithium-ion batteries expected to rise 50% this year to 600 gigawatt hours from last year.

In the auto industry, Germany's Volkswagen delivered some 452,000 battery-electric vehicles globally last year and is aiming for half of its global output to be all-electric by 2030.

In the United States, President Joe Biden has set a goal of 50% of new-vehicle sales being electric or plug-in electric by 2030.

(Reporting by Pratima Desai; additional reporting by Clara Denina; editing by Veronica Brown and Nick Zieminski)