) recently announced it intention to acquire
), a leading provider of renewable energy and energy-efficient
power conversion and power management solutions. Board of
Directors of both the companies have agreed to this deal whereby
ABB will be paying Power-One $6.35 per share in cash or $1,028
million equity value.
The proposed acquisition will be structured as a merger and is
subject to customary closing requirements which include the
approval of Power One's shareholders. The deal is expected to
close in the second half of 2013. ABB intends to fund the
acquisition with its own funds.
Through this acquisition ABB is expected to become a leading
supplier of solar inverters globally. The acquisition of
Power-One is well thought and comes at an opportune time when the
International Energy Agency has predicted the Solar PV
(Photovoltaics) system to grow by more than 10% every year until
Photovoltaics is a method of generating electrical power by
converting solar radiation into direct current electricity using
semiconductors that exhibit the photovoltaic effect. The quick
growth of Photovoltaics is primarily being driven by robust
energy demand, especially in emerging markets, rising electricity
prices and declining costs.
Power-One offers the market's most broad products of solar
inverters, for both residential and utility applications. In
addition, it also has a portfolio comprising of power solutions
which complements ABB's power conversion business. Power-One
primarily has its operations in in China, Italy, North America
and Slovakia. In 2012, the company generated $120 million in
earnings before interest, taxes, depreciation and amortization
(EBITDA) on sales of approximately $1 billion.
ABB's leading portfolio in power and automation, global
footprint and service organization make it a natural player in
solar PV. For many years ABB has brought its solutions to the
solar PV industry and is on track to generate sales of more than
$100 million in solar inverters 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
The permutation of these two companies is expected to create
value-driven growth based on innovation.
Based in Zurich, Switzerland, ABB Ltd. is a power and
automation technology company and currently has a Zacks Rank #2
(Buy). Some other players in the same industry, which can be
considered buying at the moment are
AECOM Technology Corp.
Chicago Bridge & Iron
), which have a Zacks Rank #2 (Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
AECOM TECH CORP (ACM): Free Stock Analysis
CHICAGO BRIDGE (CBI): Free Stock Analysis
FLUOR CORP-NEW (FLR): Free Stock Analysis
POWER-ONE INC (PWER): Free Stock Analysis
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