ABB to acquire 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 would position ABB as a leading global supplier of solar inverters - the ‘intelligence’ behind a solar PV system - to a market forecast 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.”

Power-One has a comprehensive offering of solar inverters and a broad global manufacturing footprint. It also has a power solutions portfolio that is adjacent to ABB’s power-conversion business. 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.

“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.”

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.