The ABB board of directors have agreed to the acquisition of Power-One for US$1.03 billion in equity value or $6.35 per share in cash.
ABB will finance the transaction out of its own funds. Power-One, with its 3,300 employees worldwide, has been ranked as one of the top three PV inverter suppliers globally. With this move, ABB is now said to be on track to generate more than $100 million in sales from solar inverters this year.
Reuters reports that the offer price is 57% higher than Power-One’s closing price on Friday, boosted by $266 million in net cash held by a debt-free Power-One. Power-One shares increased up to 59% to $6.34 (4.86) in German trading today, as Bloomberg’s market data shows.
CEO of ABB Joe Hogan elaborated on the takeover in a conference call: "We believe we are creating a global leader in solar inverters."
With Siemens pulling out, Hogan was asked why ABB was moving into the tumultuous solar sector at this point. He replied, "If you wait in this industry until it’s very clear what the industry is going to look like, you are not going to be paying the multiples that we are paying here today." He added that he does not rule out more deals, which can expand ABB’s position in the solar sector. What ABB won’t consider doing, according to Hogan, is move into module production. "You won’t see us ever do a solar panel deal," he added.
Ulrich Spiesshofer, head of the Discrete Automation and Motion division, stated that the solar market is one of the strongest growing renewable power generation sectors. "It is a field where power electronics make a key difference and our strength in power electronics and the needs of this market fit very well," he added.
Spiesshofer further stated that ABB will fill the gaps that Power-One has and Power-One, in turn, will bring strengths in fields where ABB has not been historically strong.
Power-One’s solar inverter and power solutions portfolios are also seen as being complimentary to ABB’s power conversion business.
"This transaction delivers significant value to our shareholders and will enable Power-One to accelerate its growth," added Richard J. Thompson, CEO of Power-One. He also believes that ABB is the right firm to take the Power-One brand forward. He also indicates that the time is right for the companies to come together.
The Swiss giant ABB has been placing an emphasis on its inverter business of late. ABB had recently announced the expansion of its solar inverters production to India for its central inverter PVS800. The production line has a capacity of more than 500 MW annually.