Please ensure Javascript is enabled for purposes of website accessibility

Shares of Power-One Skyrocket on Buyout Offer

By Travis Hoium - Apr 22, 2013 at 5:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of solar-inverter maker Power-One (NASDAQ: PWER) jumped 56% today after getting a buyout offer from ABB (ABB -0.83%).

So what: ABB has offered $6.35 per share for Power-One for a total price tag of about $1 billion. The deal prices the company at able 10 times EBITDA, and ABB says it will be able to realize some synergies from folding Power-One into its existing businesses.  

Now what: Shares of Power-One traded higher than the buyout offer at times today, indicating that investors are expecting a higher offer. There could be another offer, but I'd take some gains off the table because a bidding war isn't likely to erupt for the company. Large inverter competitors either have their own businesses to rely on or aren't going to be willing to spend more than $1 billion to buy a solar-inverter manufacturer. Still, it's a huge day for those patiently waiting for Power-One to pop.

Interested in more info on Power-One? Add it to your watchlist by clicking here.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

ABB Stock Quote
$26.39 (-0.83%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.