) recently completed the divestiture of Power-One's Power Solutions
business to Bel Fuse Inc (BELFA and BELFB) - a manufacturer,
distributor and marketer of power supply products - for $117
million. The decision to vend the Power Solutions business was
announced in Apr 2014, as part of ABB's strategy to streamline its
Post the acquisition of Power-One in 2013, the power solutions
segment was integrated into ABB's business. However, the business
did not generate the desired results as it failed to complement
ABB's main as well as other businesses. However, post the
divestiture, Power-One's solar inverter business will remain in
ABB's portfolio. Also, this business will support ABB's plans of
becoming a leading supplier of solar inverters globally.
The divestiture is a win-win situation for both ABB and Bel
Fuse. While the divestment will allow ABB to concentrate on its
solar power inverter product line, the inclusion of the power
solutions business will complement Bel Fuse's existing line of
Power-One's Power Solutions business has been in operation since
the past four decades and is a leader in high-efficiency and
high-density power conversion products across varied
industries including data storage, networking, industrial,
transportation and network power systems. Power Solutions primarily
designs, manufactures and sells standard products as well as
application-specific customized products from its facilities in the
U.S., Slovakia, Switzerland and China.
ABB's leading portfolio in power and automation, global
footprint and service organization makes it a natural player in
solar PV. ABB develops solutions for the solar PV industry and is
on track to generate solar inverters sales of over $100 million in
2013. 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.
ABB currently has a Zacks Rank #5 (Sell). Some better-ranked
companies in the sector include
Emcor Group Inc
Sterling Construction Co. Inc
Tutor Perini Corporation
). All three carry a Zacks Rank #2 (Buy).
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