ABB, the international power technology firm that operates its U.S. headquarters in Cary, is getting even bigger. The company has agreed to acquire Power-One for some $1 billion.

ABB, which also has a 300-employee operation at N.C. State’s Centennial Campus, announced the deal Monday, thus giving the world’s biggest electricity-networks builder inverters that allow solar power to be fed into grids.

ABB (NYSE: ABB) does a great deal of smartgrid research in the Triangle, and MIT recently praised the company as one of 50 “Disruptive Companies” for its efforts: ”Perfecting a circuit breaker for high-voltage DC lines—a crucial step for widespread use of renewable energy.”

Shareholders in the California-based company will get $6.35 a share, Switzerland’s ABB said in a statement.

ABB is looking to tap a market forecast to grow by more than ten percent annually, driven by a need for affordable energy and declining costs of producing solar power. The 7.7 times Ebitda that ABB is paying for Power-One is lower than the median multiple of 8.5 paid for alternate energy companies in the last three years, according to data compiled by Bloomberg.

ABB Chief Executive Officer Joe Hogan said there is some risk in buying Power-One amid a “tumultous market” for renewable energies like solar and wind power, Bloomberg news reported. He predicts the bet to pay off as the cost of producing solar energy is moving towards the price of purchasing power from the grid.

“If you wait in this industry until it’s very clear what it’s going to look like, you are not going to be paying the multiples that we are paying here today,” Hogan said on a conference call.

ABB employs some 2,000 people across North Carolina, including 300 in nCary.

‘Smart Move’

Power-One generated earnings before interest, taxes, depreciation and amortization of $120 million last year from sales of its inverters used in commercial and residential photovoltaic or PV systems, ABB said in a statement. The company will be integrated into ABB’s Discrete Automation and Motion unit which produces robots, motors and drives.

“We consider the acquisition of Power-One as a smart strategic move for ABB to broaden its solar product portfolio at the right time,” said Takis Spiliopoulos, an analyst at Bank Vontobel AG in Zurich. The purchase premium is acceptable given Power-One’s net cash position of $266 million, he said.

The boards of both ABB and Power-One approved the transaction.

Power-One’s inverters this year began operation at a solar power plant installed in the Atacama desert for the Chilean fruit exporter Subsole, which was seeking to escape high energy prices supplied from the nation’s conventional grid.

More Deals

Power-One is the latest bite-sized acquisition by Hogan as he looks to bring new technology to the Swiss company’s portfolio. Solar inverters convert the direct current generated by solar panels into the alternative current needed to run appliances on power grids.
Hogan did not rule out more deals which would build on ABB’s position in solar.

“I can’t say if it’s the last one we will do. You won’t see us ever do a solar panel deal,” he said on the conference call, adding that ABB wouldn’t consider buying into machinery used to maker solar panels as it’s not an area of expertise.

The purchase also contrasts with a retreat from the solar- equipment market by competitor Siemens AG. The Munich-based company is selling its solar-energy unit, expanded by the takeovers of Archimede Solar Energy and Solel Solar Systems, after deteriorating prices for photovoltaic equipment.