ABB to buy solar inverter company Power-One

ABB, the global power and automation technology group, and Power-One, a provider of renewable energy and of energy-efficient power conversion and power management solutions, have agreed to a transaction in which ABB will acquire Power-One for $6.35 per share in cash or $1028 million equity value.

The transaction is expected to close in the second half of 2013. ABB will finance the transaction out of its own funds.

“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 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 3300 people, mainly in China, Italy, the US and Slovakia. In 2012, it generated $120 million in earnings before interest, taxes, depreciation and amortisation (EBITDA) on sales of approximately $1 billion. 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.

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.

Credit Suisse acted as financial advisor to ABB, and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor. Goldman Sachs & Co acted as financial advisor to Power-One, and Gibson, Dunn & Crutcher LLP as legal advisor.