ABB, the power and automation technology group, and Power-One, a provider of renewable energy and of energy-efficient power conversion and power management solutions, have announced their boards of directors have agreed to a transaction in which ABB will acquire Power-One for $6.35 per share in cash or $1,028m equity value.
The transaction would position ABB as a leading global supplier of solar inverters 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.
“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 is adjacent to ABB’s power conversion business. Power-One employs almost 3,300 people, mainly in China, Italy, the US and Slovakia. In 2012, it generated $120m in earnings before interest, taxes, depreciation and amortisation (EBITDA) on sales of approximately $1bn.
“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.”
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.