The Swiss power technology company ABB Ltd. is buying solar equipment maker Power-One Inc. for about $1 billion.
The acquisition would ramp up ABB's capability to supply a key component used in solar systems.
It will pay $6.35 for each share of Power-One, which is based in Camarillo, Calif., just northwest of Los Angeles. The total price of $1.03 billion includes Power-One's net cash of $266 million. The per-share price represents a 57 percent premium to Power-One's closing price Friday of $4.04.
Shares of Power-One jumped more than 55 percent, or $2.25, to $6.29 Monday before markets opened. U.S.-traded shares of ABB climbed 16 cents to $21.58.
ABB will become an even larger supplier of solar inverters, which change the variable direct current output from solar panels into an alternating current, which is used by commercial electronic grids. Inverters have been a strategic focus for ABB, and the deal will help it grow significantly beyond its current revenue of around $100 million from that area, Citi analyst Mark Fielding said in a research note.
Power-One generated about $120 million in earnings before interest, taxes, depreciation and amortization on about $1 billion in revenue last year.
The deal still must be approved by regulators and Power-One shareholders. ABB, which is financing the acquisition with its own funds, expects the deal to close in the second half of this year.