AMSC's Finances Turns Off Acquisition Of The Switch

    As a quick followup, The Switch, a windmill component engineering firm, is no longer being acquired by American Superconductor Corp. When the acquisition was announced last March we called The Switch “the next success story Finland has been waiting for,” but yesterday The Switch shareholders and AMSC announced that they have agreed to terminate the acquisition agreement, due to adverse market conditions for the financing required to fund the acquisition. According to Bloomberg, AMSC has dropped 82 percent since April 5, when its largest customer, Chinese wind-turbine maker Sinovel Wind Group Co., refused to accept contracted shipments.

    The Switch President and CEO Jukka-Pekka Mäkinen said in a press release, “The fundamentals of our business strategy remain in place and the outcome of the proposed acquisition will not change our position in the market. We are an independent component supplier with the preferred technology required by the market, and our intent is to be the partner of choice in renewable energy.”

    Per the terms of the amended acquisition agreement, The Switch shareholders will retain the €14.2 million advance payment that was made by AMSC on June 29 as a break-up fee. The Switch was founded in December 2006, by the combination of Rotatek Finland, Verteco and Youtility. The company provides low-speed permanent magnet generator designs for turbines without gearboxes that may improve efficiency and require less maintenance.