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Advanced Energy Industries, Inc. (Nasdaq: AEIS) has signed an agreement to acquire PV Powered Inc., a manufacturer of grid-tied photovoltaic (PV) inverters in the residential-, commercial-, and utility-scale markets.
Advanced Energy will acquire PV Powered for a purchase price of up to $90 million consisting of $50 million to be paid at closing ($35 million in cash and $15 million in common stock) as well as up to $40 million in a potential earn-out based on PV Powered's full year 2010 financial results.
The acquisition is indicative of a consoldiation trend in the market.
Founded in 2003 and based in Bend, Oregon, PV Powered has approximately 90 employees and $21 million of revenues in 2009. Its inverters range in size from 30kw to 260kW for the commercial market and 1kw to 5kw for the residential market.
The company says it offers the industry's first standard 10 year product warranty and optional 20 year extended warranty.
"The addition of PV Powered's transformer based inverters with power levels below 500 kW for the small to mid range commercial inverter market Allows Advanced Energy to target a portion of the market that we have not yet addressed. As a combined company, our comprehensive portfolio of both transformerless and transformer-based inverter products will serve the entire spectrum of commercial project sizes from 30kw to multi-megawatt utility installations," said Hans Betz, CEO of Advanced Energy.
Under the agreement, The transaction will be subject to a number of other customary closing conditions and regulatory approvals including Hart Scott Rodino. Throughout 2010, PV Powered will operate as a wholly-owned subsidiary, continuing to sell and support its branded PV Powered inverters.
"Currently, we anticipate sales of PV Powered's inverter to contribute as much as $40-$50 million revenue to Advanced Energy's 2010th Of that, we expect $30-35 million to come from sales to the commercial market and $10-15 million from the residential market. We anticipate gross margins on these products to be in the range of 26-29% and have additional operating expenses of $3-4 million."