AE dumps solar business; layoffs expected

Faced with slumping sales in its solar inverter business, and no suitors willing to step in to buy it, Advanced Energy Industries, Inc., announced Monday it was getting out of the business.

The move will cost the company millions of dollars and likely hundreds of jobs.

The impact on jobs at the Fort Collins-based business is unknown, but the company said in a statement it expects to spend $260 million to $290 million to wind down the company, including $15 million in employee termination costs and $30 million to $45 million in severance and other expenses related to the decision.

INVESTMENT: Gov. cheers Intel's solar investment in Fort Collins

As of Dec. 31, AE, which develops power and control technologies for thin-film manufacturing and solar-power generation, employed 1,583 people globally. Founded in Fort Collins in 1980, AE manufactures inverters in Fort Collins, Canada and China.

A solar inverter converts DC power collected by solar panels to AC power for use in homes, commercial or utility applications.

Inverter sales dropped 39 percent in the first quarter of the year compared to the same time frame last year, and nearly 25 percent between the fourth quarter of 2014 and the first quarter of 2015.

Sales were impacted by "seasonality, pricing pressure and the effect on sales of our pursuit of strategic alternatives for this business," the company said in its first quarter earnings report.

In December, AE announced it was examining a range of options for its solar inverter business, including a potential sale, joint venture, spin-off or partnership.

SPOTLIGHTING: Fort Collins celebrated at Smithsonian

"To date, strategic discussions with third parties regarding the sale of the entire business have not provided sufficient value and terms that were in the best interest of our shareholders, customers, employees and partners, AE President and CEO Yuval Wasserman said in a written release. "Therefore, the company has made the decision to wind down the solar inverter business."

The company said it plans to focus solely on its Precision Power business. Sales were flat during the last two quarters and up nearly 28 percent year over year due to record semiconductor sales, the company reported.

"Following on the heels of a strong 2014 and first quarter 2015 in Precision Power that reinforced the strength of our business model, and after an extensive strategic process over the last six months, we concluded that focusing solely on our Precision Power business, and exiting the Solar Inverter business aligns with our long-term goal of maximizing value for our shareholders," Wasserman said.

Company representatives did not immediately return calls for comment.

As recently as April, Advanced Energy was touting its major deal with Swinerton Rewable Energy of San Francisco, which requested 325 megawatts of solar projects from AE. It was the largest order for inverters AE had received.