WEG S.A. has agreed to acquire utility-scale wind turbines business from Northern Power Systems (NPS), a designer and manufacturer of permanent magnet direct drive wind turbines and grid-friendly power technology components, with headquarters in Barre, Vermont, USA.
Under the agreement, the proven utility scale direct drive technology developed and successfully deployed to date by both NPS and WEG will be solely owned by WEG and its affiliates. All assets, including the related patent portfolio for utility wind greater than 1.5 MW and the engineering team largely responsible for developing this technology, become part of WEG. The engineering team will remain based in Vermont and will work alongside the Brazilian based wind engineering team to continue successful product development work.
The companies plan an on-going collaboration providing wind solutions around the world, WEG focusing on utility scale wind and NPS on distributed energy solutions, including distributed wind. WEG will continue to compensate NPS under the existing arrangement paying royalties for sales in South America resulting in future payments of up to an approximately US$10 million. Additionally, WEG will pay NPS up to a further US$17.5 million in royalty payments over the next decade for turbines shipped anywhere outside of South America.
WEG and NPS started collaborating in 2013 and since then have successfully introduced a permanent magnet direct drive wind turbines solution in the Brazilian market.
Mr. Eduardo de Nóbrega, WEG Energy Managing Director, said:
"We have decided to move forward and take this fundamental step in our wind energy internationalization and growth strategy."
Ciel Caldwell, Northern Power Systems President and Chief Operating Officer added:
"With a rapidly evolving global focus on affordable clean energy, I am very excited in the future for Northern focusing on delivering distributed energy solutions, and for WEG to expand its regionally successful utility wind activities by offering this utility-scale platform globally. This agreement is a structured way for NPS and WEG to continue such successes in the global market."
According to Mr. Nóbrega:
"We look forward to a continued collaboration with NPS as we look globally at wind solutions. We have proven in the Brazilian market that we can successfully bring the NPS developed technology to market and we intend to do so globally. With the compliment of an engineering team from NPS and our existing team we believe that we can be successful in bringing appropriate technological advancements to our wind platforms for global expansion. Looking at the opportunities that would arise in distributed wind, we look forward to, in near future, also working with NPS on delivering distributed wind in relevant markets."
Ms. Caldwell concluded:
"The economics of this transaction for NPS provide both near-term cash acceleration as well as an on-going robust income stream, giving us further confidence in our balance sheet.