ABB to acquire Power-One for $1,028 million to boost solar inverter business

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Greentech Lead Europe: ABB, a provider of power and automation technology, announced it will acquire Power-One, a provider of renewable energy and of energy-efficient power conversion and power management solutions, for $6.35 per share in cash or $1,028 million equity value.

The transaction is expected to close in 2H 2013, subject to shareholder and regulatory approvals, ABB said.

The transaction would position ABB as a leading global supplier of solar inverters. The International Energy Agency has forecast 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.

“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.”

Power-One delivers a wide range of solar inverter solutions, ranging from residential to utility applications. The company has a broad global manufacturing footprint.

Power-One’s power solutions portfolio will complement ABB’s power conversion business.

Power-One employs almost 3,300 people, mainly in China, Italy, the US and Slovakia. In 2012, it generated $120 million in earnings before interest, taxes, depreciation and amortization (EBITDA) on sales of approximately $1 billion.

“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.”

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. ABB is on track to generate sales of more than $100 million in solar inverters in 2013.

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.

The merger agreement contains certain agreed deal protection mechanisms. Investment funds affiliated with Silver Lake Sumeru have entered into an agreement to vote in favor of the transaction. The transaction is expected to close in the second half of 2013. ABB will finance the transaction out of its own funds.

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