Financial News Release
Lawrence D. Firestone
Advanced Energy Industries, Inc.
||Advanced Energy Industries, Inc.
FOR IMMEDIATE RELEASE
ADVANCED ENERGY ANNOUNCES ACQUISITION OF SOLAR INVERTER PROVIDER, PV
Fort Collins, Colo., March 24, 2010 Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today
announced it has signed a definitive agreement to acquire PV Powered Inc., a leading manufacturer
of grid-tied PV inverters in the residential, commercial, and utility-scale markets. The
acquisition is expected to add an estimated $40-50 million to Advanced Energys 2010 revenues and
be neutral to marginally dilutive to GAAP net income in 2010.
We are very excited to announce this acquisition and believe the combination of Advanced Energy
and PV Powered will continue our strong momentum in the inverter market, propelling us forward as a
leading manufacturer of solar inverters in North America. The addition of PV Powereds
transformer-based inverters with power levels below 500kw for the small to mid range commercial
inverter market allows Advanced Energy to target a portion of the market that we have not yet
addressed. As a combined company, our comprehensive portfolio of both transformerless and
transformer-based inverter products will serve the entire spectrum of commercial project sizes from
30kw to multi-megawatt utility installations, placing us firmly at the heart of the emerging and
fast-growing solar inverter market, said Hans Betz, chief executive officer of Advanced Energy.
PV Powered is an innovation leader for high-reliability transformer-based PV inverters utilized in
commercial roof top and ground mount systems in the North American market. Founded in 2003 and
based in Bend, Oregon, PV Powered is a privately held company with approximately 90 employees and
$21 million of revenues in 2009. Its inverters range in size from 30kw to 260kw for the commercial
market and 1kw to 5kw for the residential market, with market leading
efficiency ratings. PV
Powereds experienced inverter engineering team has continuously
optimized the performance and reliability of its inverters allowing PV Powered to offer the
industrys first standard 10 year product warranty and optional 20 year extended warranty.
The employees and management of PV Powered are extremely excited at the prospect of joining
Advanced Energy, said Gregg Patterson, chief executive officer of PV Powered. PV Powered and
Advanced Energy have a collective history of industry innovation, driven by a commitment to power
conversion efficiency and inverter reliability that leads the market. Both organizations share a
common mission to deliver the lowest levelized cost of energy and the highest levels of customer
satisfaction. Together, we can offer the broadest technology and product portfolio in the
Under the agreement, Advanced Energy will acquire PV Powered for a purchase price of up to $90
million consisting of $50 million to be paid at closing in the form of $35 million in cash and $15
million in Advanced Energys common stock, as well as up to $40 million in a potential earn-out
based on PV Powereds full year 2010 financial results. The transaction will be subject to a number
of other customary closing conditions and regulatory approvals including Hart Scott Rodino.
Throughout 2010, PV Powered will operate as a wholly-owned subsidiary, continuing to sell and
support its PV Powered branded inverters.
Currently, we anticipate sales of PV Powereds inverter to contribute as much as $40M-$50 million
to Advanced Energys 2010 revenue. Of that, we expect $30-35 million to come from sales to the
commercial market and $10-15 million from the residential market. We anticipate gross margins on
these products to be in the range of 26-29% and have additional operating expenses of $3-4 million.
Needham & Company, LLC acted as the financial advisor and provided a fairness opinion to Advanced
Energy related to this transaction.
Management will host a conference call today, March 24, 2010, at 2:00 pm Eastern Daylight Time to
discuss the acquisition. Domestic callers may access this conference call by dialing (888)
713-4717. International callers may access the call by dialing (816) 650-2836.
Participants will need to provide a conference passcode 64949878. For a replay of this
teleconference, please call
(800) 642-1687 or (706) 645-9291, and enter the passcode 64949878. The
replay will be
available through 11:59 pm Eastern Daylight Time, March 26, 2010. A webcast will also be available
on the Investor Relations webpage at http://ir.advanced-energy.com.
Statements in this press release and information discussed on the related conference call
concerning the proposed transaction and future business, operating and financial condition of the
company and PV Powered, including expectations regarding revenues, gross margins, and operating
expenses for future periods, including achievement of the milestones subject to the earn-out under
the merger agreement are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements are subject to known and unknown risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such statements. Such risks and
uncertainties include, but are not limited to: satisfaction of the closing conditions under the
definitive agreement and the successful closing of the acquisition of PV Powered, the amount of the
final purchase price, and the successful integration of the operations of Advanced Energy and PV
Powered following the closing and our expectations surrounding the benefits of the transaction; as
well as the effects of global macroeconomic conditions upon demand for our products, the volatility
and cyclicality of the industries the company serves, particularly the semiconductor industry, the
timing of orders received from customers, the companys ability to realize cost improvement
benefits from the global operations initiatives underway, and unanticipated changes to managements
estimates, reserves or allowances. These and other risks are described in Advanced Energys Form
10-K, Forms 10-Q and other reports and statements filed with the Securities and Exchange
Commission. These reports and statements are available on the SECs website at www.sec.gov. Copies
may also be obtained from Advanced Energys website at www.advancedenergy.com or by contacting
Advanced Energys investor relations at 970-407-6555. Forward-looking statements are made and based
on information available to the company on the date of this press release. The company assumes no
obligation to update the information in this press release.
About Advanced Energy
Advanced Energy® is a global leader in innovative power and control technologies for high-growth,
thin-film manufacturing and solar-power generation. Specifically, Advanced Energy targets solar
grid-tie inverters, solar cells, semiconductors, flat panel displays, data storage products,
architectural glass and other advanced applications.
About PV Powered
PV Powered is the innovation leader for grid-tied PV inverters in the residential, commercial and
utility markets, setting the industry standard for innovation in reliability and efficiency.
Founded in Bend, Oregon in 2003 and privately owned, the company brings together one of the most
experienced design teams in solar power electronics. PV Powered was recently selected to receive a
Stage 2 award under the Solar Energy Grid Integration System (SEGIS) program by the U.S. Department
of Energy (DOE). The company is leading a team of recognized distributed energy and smart grid
partners in developing innovations that increase energy harvest, reduce the cost of PV systems, and
remove barriers to high levels of PV grid penetration. For more information on the company, visit