Power-One’s stockholders have overwhelmingly approved the sale of the Camarillo, California-based energy-products company to ABB for $6.35 per share of common stock. Earlier in the month, that worked out to roughly a billion dollars. The company will be integrated into ABB’s Discrete Automation and Motion unit, which produces robots, motors, and drives.
Power-One created the Z-Bus, a technology for monitoring and control of power supplies that was implemented in the company’s point-of-load (PoL) regulator ICs. Power-One’s successful patent infringement lawsuit in 2005 knocked the wind out of the sails of other PoL companies until 2009, when a formula for royalty agreements became routine.
However, Power-One never limited itself to power management ICs, growing by acquisition and innovation into the power supply business and solar-power and wind-power inverters, as well as expanding its global sales reach.
ABB, headquartered in Zurich, was created by the 1988 merger of Sweden’s ASEA and Switzerland’s Brown, Boveri & Cie. It is a global leader in power and automation technologies for utility and industrial customers.
Patrick Winters, writing in Bloomberg Business News, said that the deal gives “the world’s biggest electricity-networks builder inverters that allow solar power to be fed into grids.” That’s a good characterization of recent ABB acquisitions.
Last year, ABB bought Tropos Networks, which gave it with a customized wide-area wireless broadband communications product line optimized for distribution grid management. Distribution is the part of the grid that takes electricity from power generation and transmission entities and sells it to the retailers who deal with end customers (see “Smart-Grid Demand Management Requires Robust Control Systems,). In 2010, it also acquired Ventyx, which provides utilities with distribution management and supervisory control and data acquisition (SCADA) software. In the U.S., ABB has invested $10 million on a “smart grid center of excellence,” a testing lab and demo center in North Carolina.
On its Web site, Power-One claims that it is the second largest manufacturer of solar power inverters globally and states that it has recently opened manufacturing centers in Phoenix, Arizona, and Toronto, Canada.
Products comprise central and string inverters for photovoltaics. Central inverters are intended for large solar applications such as field installations, industrial facilities, and large buildings. Power-One’s go up to 1.5 MW. String inverters are smaller scale, but Power-One’s largest is still a three-phase unit, with a peak output of 5.8 kW. On the wind side, Power-One’s inverters scale to 50 kW.
Does ABB’s interest in the grid, particularly the Smart Grid, suggest that Power-One’s divisions in rack and open-frame power supplies and Intermediate Bus Architecture PoLs will soon on the block? That’s hard to say.
On its own, Power-One has chosen to diversify into a number of product areas that are solid cash cows. One example is Melcher, a European company that specializes in railway power supplies that have unique requirements for reliability and weather resistance, as well as the ability to maintain tight regulation over long cable runs. It would be surprising if the combined entity sheds the division that makes the Z-bus PoLs, which provides a steady income through licensing income from companies whose power supply products provide remote sensing and control—at least, until those patents expire.