Unlocking Value in a Public Company

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

We worked with Richard and his team to develop a detailed plan to support growth in the inverter business and restore profitability and operational excellence in the power supply business. Creating two distinct business units was critical to the success of this plan which included:

  • Separating the company into two business units with key functional areas of sales, marketing, engineering and manufacturing under the direction of general managers thereby improving focus and product execution
  • Accelerating investment in building out global sales and marketing to support growth of the inverter business in all key geographies
  • Expanding the engineering roadmap to introduce a new line of utility-scale products
  • Reorganizing the global supply chain for the power supply business, moving operations closer to key customers and vendors which resulted in improved margins and competitiveness
  • Building US based manufacturing capacity to support North American inverter customers
  • Acquiring complementary technology to add monitoring software, enhancing the customer value proposition
  • Reducing debt, thereby improving the company’s capital structure and providing needed flexibility to invest

Results

During the four-year investment period, the value creation plan led to strong growth and improved margins, cash flow and EBITDA. Over this period, revenues approximately doubled and EBITDA grew approximately nine-fold. In July 2013 ABB Ltd. acquired Power-One for over $1 billion in cash.

“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