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Charging Up a Renewable Energy and Power Conversion Leader

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 solar inverters. The company has a 40-year history as a leader in power supply products for renewable energy, servers, storage and networking, and industrial power systems.

Silver Lake Sumeru team members had a long-term relationship with the new CEO of Power-One, which included working together on several transactions over several years. 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 the CEO and developed 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 team’s supply chain expertise was vital to a successful partnership with management and the company.

Value Creation

Creating Separate Business Units

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 goal for the power-supply business.

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

Growth, Profitability and Acquisition

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 9X. 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

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