ABB Inc., Zurich, Switzerland, continued its aggressive North American expansion efforts with the announcement that it will seek to buy Power-One, a California-based maker of solar photovoltaic (PV) inverters, for approximately $1 billion. The boards of both companies have agreed to the transaction, which will be considered by Power-One shareholders at a special meeting. If approved by shareholders and regulators, the deal would close in the second half of 2013.
Power-One, based in Camarillo, Calif., has been making power-conversion and power-supply products for a variety of industries, including renewable energy, for 40 years. The company employs 3,300 people, most of them in China, Italy, the United States and Slovakia, and generated $120 million in 2012 earnings on sales of approximately $1 billion. On becoming part of Swiss power giant ABB, Power-One would gain access to ABB’s substantial research and development, services and sales capabilities.
Following on its blockbuster acquisitions of motor giant Baldor Electric in 2010 and Thomas & Betts in 2012, as well as a broad mix of smaller line-expansion acquisitions, the addition of Power-One further cements ABB’s position as a major contender in the North American electrical products market.
The transaction would position ABB as a leading global supplier of solar inverters — the intelligence behind a solar PV system — to a market forecasted by the International Energy Agency to grow by more than 10% per year until 2021. This rapid growth is being driven by rising energy demand, especially in emerging markets, rising electricity prices and declining costs, as well as various government renewable-energy incentives around the world.
“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.”
Power-One has one of the market’s most comprehensive offerings of solar inverters, ranging from residential to utility applications, and a broad global manufacturing footprint. It also has a power solutions portfolio that ABB’s release announcing the agreement described as “adjacent” to its existing power conversion business.