Power management solutions provider AcBel Polytech Inc (康舒科技) announced on Friday that it would acquire a 100 percent stake in ABB Ltd’s power conversion division for US$505 million in cash.
The transaction is subject to regulatory approvals and is expected to be completed in the second half of this year, AcBel said in a regulatory filing.
The Taiwanese firm said the Swiss engineering group’s power conversion division is a leading provider of power products, systems and services.
Photo: Fang Wei-chieh, Taipei Times
With manufacturing facilities in Mexico, China and India, the Plano, Texas-based division offers innovative solutions for telecom, data center, supercomputing and electric vehicle charging infrastructure, as well as warehouse automation applications, it added.
AcBel expects the transaction to help strengthen its product portfolio, grow its customer base and enhance its local research and development, manufacturing, commercial and service capabilities in the US, the filing said.
“By integrating ABB power conversion’s cutting-edge technologies and development expertise in system solutions, AcBel will accelerate its progress of expanding into an integrated solutions provider,” the filing said. “Furthermore, the collaboration will allow AcBel to grow its customer base in the US, strengthen its local service capabilities and extend its network of global manufacturing facilities.”
The power conversion division, formerly known as Lineage Power, was acquired by ABB as part of the GE Industrial Solutions acquisition in 2018.
The division employs roughly 1,500 employees worldwide, predominantly at three major production sites and its US headquarters. It generated revenue of approximately US$440 million and adjusted income from operations of US$54 million last year, with a clear focus on the North American market.
The Tamsui District (淡水), New Taipei City-based AcBel offers power solutions for a wide range of applications including PCs, smart home appliances, smartphones, servers, networking equipment, sustainable energy devices and electric vehicle-related products.
The firm reported record-high revenue of NT$25.32 billion (US$833.8 million) last year, up 15.59 percent from a year earlier, with over 8,800 employees worldwide.
“We believe this transaction is beneficial to both parties, as we are highly complementary to each other in product portfolio, customer base and expertise,” AcBel chairman Jerry Hsu (許介立) said in a statement.
“By combining AcBel’s core capabilities in smart manufacturing and original design manufacturing with Power Conversion’s cutting-edge technologies in premium and high-quality products, along with its advanced system solutions, we will be able to establish a more comprehensive product portfolio and expand our solution offerings to continue to create value for our customers and investors.”
AcBel said it plans to finance the transaction through a combination of funding sources including its corporate funds and debt financing.
At an annual banquet for employees held in Taipei on Jan. 13, Hsu said the company would achieve better business performance this year than last year, and revenue in the first quarter is forecast to be on par with that a year earlier.
By strengthening the firm’s bargaining power in procurement, increasing adoption of factory automation and adjusting its production lines, its gross margin is expected to gradually rise to 20 percent this year, compared with 14 to 17 percent over the past few years, he said.
AcBel reported a gross margin of 16.28 percent in the first three quarters of last year. Net profit grew 47.92 percent year-on-year to NT$750 million over the period, with earnings per share of NT$1.45, company data showed.
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