ABB to Buy Power-One for Major Stake in Solar Inverters

June 3, 2013

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.