Italian company Fimer S.p.A has agreed to acquire ABB’s solar inverter business. According to ABB, the transaction will enable the company to focus its business portfolio on other growth markets.
Courtesy of Fimer
ABB’s solar inverter business has approximately 800 employees in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland. It includes the solar inverter business from Power-One which was acquired by ABB’s Discrete Automation and Motion division in 2013. It is currently within ABB’s Electrification business and achieved revenues of approximately $290 million in 2018, down from a high of $743 million in 2012, according to Reuters.
Fimer has stated it will honor all existing warranties and ABB will compensate the company for taking the business and its liabilities over.
As a result, ABB expects to take an after-tax non-operational charge of approximately $430 million in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly. Around 75 percent of this charge is represented by cash outflows ABB will pay to Fimer from the deal closing date through 2025. In addition, ABB expects up to $40 million of carve-out related separation costs starting in the second half of 2019.
After closing of the transaction, ABB expects the operational EBITA margin for the electrification business to be impacted positively by slightly more than 50 basis points, supporting the business’ progress towards its target margin corridor of 15-19 percent.
Completion is expected in the first quarter of 2020 and will be subject to certain conditions, including the completion of the carve-out and prior consultation with employee representative bodies.
Filippo Carzaniga, CEO of Fimer, speaking on the acquisition, said, “We are glad to announce this further step in our development as FIMER’s focus on the solar business will be greatly enhanced by this integration. We will continue the excellent job carried out by ABB in recent years, combining precious resources, knowledge and expertise in Italy and worldwide. With a strengthened portfolio, we are better placed to shape the future of this increasingly strategic business.”