ABB, a technology leader in electrification and automation, has reached an agreement to sell its Power Conversion division to AcBel Polytech Inc. for $505 million in cash.
The transaction is subject to regulatory approvals and is expected to be completed in the second half of 2023. Upon closing, ABB expects to record a small non-operational book gain in Income from operations on the sale. The Power Conversion division, formerly Lineage Power, was acquired by ABB as part of the GE Industrial Solutions acquisition in 2018 and is not core to ABB, the statement said.
The division is based in Plano, Texas, USA, and employs roughly 1,500 employees worldwide, predominantly at three major sites and the US headquarters. It generated revenues of approximately $440 million and Income from operations of approximately $50 million in 2022, with a clear focus on the North American market.
It is a global provider of end-to-end power conversion solutions for mission-critical applications in the telecommunications, data center and industrial sectors. The business is well positioned and currently capitalizing on key technology mega trends such as the rollout of 5G networks, the increased use of cloud computing and manufacturing automation, according to the statement.
“We are very happy to have found an excellent new home for this specialized business that can go from strength to strength under the leadership of AcBel in the future,” said Björn Rosengren, ABB CEO. “We are also delighted to complete all divisional portfolio divestments announced at the end of 2020, including the sale of Dodge and the spin-off of Accelleron.”
Jerry Hsu, Chairman of AcBel commented: “We sincerely welcome Power Conversion to join the AcBel family. We believe this transaction is beneficial to both parties as we are highly complementary to each other in product portfolio, customer base and expertise. 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.”
Citi is acting as exclusive financial adviser and Milbank LLP is serving as legal counsel to ABB on the transaction.
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