ABB to Acquire Power-One - Analyst Blog
26 Avril 2013 - 7:30PM
Zacks
ABB Ltd. (ABB) recently announced it intention
to acquire Power-One, Inc. (PWER), 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
2021.
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 overall.
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. (ACM), Fluor Corp. (FLR) and
Chicago Bridge & Iron (CBI), which have a
Zacks Rank #2 (Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
AECOM TECH CORP (ACM): Free Stock Analysis Report
CHICAGO BRIDGE (CBI): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
POWER-ONE INC (PWER): Free Stock Analysis Report
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