ABB to acquire renewable energy firm Power-One for $1 billion

Swiss power and automation group ABB today said it will acquire renewable energy firm Power-One Inc for around $1 billion, in order to expand its presence in the solar inverters market.

Under the agreed deal, Zurich-based ABB will pay $6.35 per share in cash or $1.028 billion equity value. The transaction includes Power-One's net cash of $266 million.

California-based Power-One is a leading provider of renewable energy, energy-efficient power conversion and power management solutions. It is also designs and sells photovoltaic inverters.

Its renewable energy products are used by utilities, homes and for a variety of industries including renewable energy, servers, storage and networking, industrial and network power systems.

Its offers RE inverters convert photovoltaic energy into useable grid connected power for use in residential, commercial, and utility-grade solar panels, primarily  for networking systems, network servers and storage, and industrial equipment.

The company, which has sales, manufacturing, and R&D operations in Asia, Europe, and the Americas had posted net income of $76 million in 2012 on revenues of $1.02 billion.

ABB said that the deal will give Power-One access to ABB's substantial R&D, global service and complement its own growing inverter business.

''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 percent per year until 2021, ABB said in a statement. "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.''

Solar inverters are one of the fastest-developing technologies in power electronics, requiring substantial investment in research and development. In 2012, ABB invested about $1.5 billion in R&D overall and is on track to generate sales of more than $100 million in solar inverters in 2013.

After the acquisition, which is expected in the second half of 2013, Power-One will be integrated into ABB's Discrete Automation and Motion division.