Middleton firm grows on wind farm sales
A story in today’s Capital Times illustrates the economic development power of alternative energy:
MIDDLETON – Wind power keeps charging up the prospects for the local unit of American Superconductor Corp.
The firm’s Middleton-based Power Electronics Systems unit makes voltage regulation systems that have been racking up millions of dollars in sales for wind farms across the globe. The wind farms use the systems to optimize the operation of the wind turbines and in connecting to power grids.
American Superconductor is projecting revenues for the unit to rise 50 percent to $22 million for its current fiscal year 2007 that ends next March 31. With the acquisition announced today of a company it has been working closely with, those revenues now are projected to double to $50 million in fiscal 2008.
American Superconductor, which is based in Westborough, Mass., said it will acquire Windtec for about $12.4 million in stock. Windtec is a privately-held Austrian company that designs and licenses wind turbine systems. More stock will be issued and paid out if certain revenue growth targets are made through fiscal 2011.
Windtec, which uses the PowerModule voltage regulation systems made in Middleton in its wind systems, will become part of the Power Electronics unit but will continue to be based in Austria. All of its 35 employees will be retained, including founder Gerald Hehenberger, American Superconductor said.
Prior to the acquisition, which is expected to close in January, American Superconductor had about 250 employees. The Power Electronics unit, which includes a facility in New Berlin, has about 100 employees, with about 75 of those in Middleton.
American Superconductor spokesman Rick Sheehy said the deal will not immediately result in more jobs here, but said “Who knows three years from now?”
Windtec was projecting net income of $1 million on revenues of $13 million this year, meaning the Power Electronics unit is expected to generate more than $10 million in organic growth in fiscal 2008. Windtec, which had just $2.7 million in revenues last year, also has a backlog of orders valued at more than $20 million.
“There’s always classic business talk about synergies and that’s really the case here,” Sheehy said in an interview today. “There are a lot of synergies and it made a lot of sense to combine the companies. This will help us expand even more into the wind power generation market.”
In combination with the acquisition announcement, American Superconductor announced an order from Windtec for PowerModule systems made in Middleton for use in controlling power flow in 165 wind turbines in China. With the order, PowerModule systems will be powering 785 Chinese wind turbine systems and approximately 1,200 megawatts of China’s wind generated electricity, the company said.
And with rising concerns about energy costs and supplies and greenhouse gas emissions, wind power is expected to be an even stronger driver for the company’s growth.
“Wind power is one of the most dynamic markets in electrical energy today, and virtually all industry experts predict that it will play an increasingly important role in powering the world’s homes and businesses,” Greg Yurek, American Superconductor founder and CEO, said in a statement. “According to the Global Wind Energy Council, the installed base of wind generated electricity worldwide is expected to double from approximately 59,000 megawatts in 2005 to nearly 135,000 megawatts in 2010. We believe this acquisition will strongly enhance AMSC’s revenue growth in the wind energy market and speed the time to achieving overall corporate profitability.”