Background

Power-One, Inc. is a leading provider of renewable energy and energy-efficient power conversion and power management solutions and a leading designer and manufacturer of photovoltaic inverters. The company has a 40-year history as a leader in high-efficiency and high-density power supply products for a variety of industries including renewable energy, servers, storage and networking, industrial and network power systems.

The Silver Lake Sumeru team had a long-term relationship with the CEO of Power-One, Richard Thompson, which included working together on several transactions over a number of years. When Richard became the CEO of Power-One in 2008, the company was misunderstood by public investors and lacked the necessary capital and expertise to support investment in the inverter business and drive operational improvement of the power supply business. The Sumeru team worked closely with Richard developing a solution to provide the needed capital and support of key operational initiatives while leaving the company public with a strong balance sheet through a structured equity investment. Silver Lake Sumeru’s investment was accompanied by a detailed value creation plan designed to enhance growth, improve profitability and strengthen the company’s financial position. In addition to capital and in-depth understanding of the company’s technology, customers, and end markets, our teams’ supply chain expertise was vital to a successful partnership with management and the company.

Value Creation

Sumeru’s work with Power-One included creating separate business units for the company’s inverters and its power-supply products. Growth was the goal for the inverter business, while profitability and streamlined operations were the goals for the power-supply operation.

Creating two distinct business units with dedicated sales, marketing, engineering, and manufacturing capabilities under the direction of general managers sharpened the focus of both units and improved operational execution.

For the inverter business, we partnered with management to build global sales and marketing operations, increase U.S. manufacturing capacity and introduce new products targeting growth markets in renewable energy generation. For the power-supply business, the Sumeru team reorganized the global supply chain so that important operations could be moved closer to key customers and vendors, which improved its margins and made the business more competitive.

With Sumeru’s assistance, Power-One acquired complementary technologies and reduced debt, which put the company in an even stronger position.

Results

During the four years our team worked closely with Power-One, the firm’s plans for growth and profitability showed results. Power-One’s revenues approximately doubled and its EBITDA grew approximately nine-fold. In July 2013, multinational corporation ABB Ltd. Acquired Power-One for more than $1 billion in an all-cash deal.

“We needed the support of a partner who understood our business, could help our team navigate complex changes, and was able to move quickly. Silver Lake Sumeru was the ideal firm to fit our needs and with their help, we achieved a very positive outcome for shareholders, employees, and customers.”

— Richard Thompson, CEO

The testimonials of current or past portfolio company executives are provided as illustrative examples and designed to demonstrate the benefits to portfolio companies of partnering with us. These testimonials are primarily aimed at prospective portfolio companies and not intended to solicit investors. The portfolio companies covered in these testimonials do not represent all portfolio company investments we have made.  The experiences highlighted in these testimonials are solely those of the executives profiled in these testimonials and may not necessarily represent or be indicative of the current, past or future experiences of other portfolio companies. Past results and experiences discussed in these testimonials are not indicative, or a guarantee of future results and experiences. We have not provided cash or other type of compensation in exchange for receiving these testimonials. We do not believe there are typically any material conflicts associated with providing these testimonials.  The compensation of our portfolio company executives is primarily driven by the performance of their respective portfolio companies and any discretion we exercise in such compensation determinations is not influenced by whether an executive has provided a favorable testimonial. Additionally, the economic interests of our portfolio companies’ executives are generally well-aligned with ours and those of our investors. Nevertheless, the fact that these testimonials have been provided by individuals whose compensation we exercise a certain level of control over may incentivize them to provide favorable evaluations of their experiences working with us.