Zurich-based power and automation technology provider ABB has agreed to purchase Camarillo, CA-based component maker Power-One Inc. for $6.35 per share in cash or $1,028 million in equity value. The transaction will position ABB as a leading global supplier of solar inverters – the "intelligence" behind a solar photovoltaic (PV) system.
Power-One manufactures a broad range of power conversion and power management solutions, including solar inverters for residential and industrial applications. Power-One employs almost 3,300 people, mainly in China, Italy, the U.S. and Slovakia. In 2012, it generated sales of approximately $1 billion.
"Solar PV is becoming a major force reshaping the future energy mix because it is rapidly closing in on grid parity," said ABB's CEO, Joe Hogan. "Power-One is a well-managed company and is highly regarded as a technology innovator focusing on the most attractive and intelligent solar PV product. The combination of Power-One and ABB is fully in line with our 2015 strategy and would create a global player with the scale to compete successfully and create value for customers, employees and shareholders."
The International Energy Agency expects the solar inverter market to grow by more than 10 percent per year until 2021. This rapid growth is being driven by rising energy demand, especially in emerging markets, rising electricity prices and declining costs.
"This transaction delivers significant value to our shareholders and will enable Power-One to accelerate its growth," said Richard J. Thompson, CEO of Power-One. "Together we can better address the growing worldwide demand for innovative, renewable energy solutions and strengthen our global leadership. I believe ABB is the right partner and now is the ideal time for our companies to join forces."
ABB is on track to generate sales of more than $100 million in solar inverters in 2013, the company said in a release. Solar inverters are one of the fastest-developing technologies in power electronics, requiring substantial research and development (R&D) resources. In 2012, ABB invested about $1.5 billion in R&D overall.
In the European Union, prices of solar PV modules – major users of solar inverters -- will see price stabilization for the first time since 2009, according to research and analysis firm IHS (http://www.ihs.com/). The average selling price (ASP) for Chinese crystalline silicon (c-Si) PV modules shipped to the European Union increased by 4 percent in March, the first monthly rise since January 2009, according to the IHS. Prices are set to rise by another 1 percent in April and by an average of 4 percent during the next three months.
"The combination of these two successful companies will create significant value-driven growth based on innovation – which means inverters offer opportunities for differentiation – global reach, high quality and technology leadership," said Ulrich Spiesshofer, head of ABB's Discrete Automation and Motion division, into which Power-One will be integrated. "The acquisition supports the implementation of the division's strategy for renewable energy and the goal to build on our strength in power electronics."
The transaction is structured as a merger and is subject to the satisfaction of customary closing conditions, including approval of Power One's shareholders at a special meeting and receipt of customary regulatory approvals.