ABB will divest its Accelleron turbocharging business

ABB spun off Accelleron and listed on six exchanges in Switzerland

The transaction will enable ABB and Accelleron to focus on their respective core strategies and creating long-term value for stakeholders

ABB's shareholders can realize the full value of Accelleron while allowing ABB to focus on its core portfolio in electrification and automation

As a market leader in heavy-duty turbocharging, Accelleron can focus on realizing its full potential in the large engine industry

Accelleron is a profitable and cash-generating business that aims for an attractive dividend policy

ABB shareholders will receive 1 Accelleron share for every 20 ABB shares they hold

The spin-off is subject to the approval of ABB's extraordinary general meeting (EGM) scheduled for September 7, 2022, followed by a planned listing on October 3, 2022

Following the decision of the Board of Directors, ABB announced today its intention to spin off its market-leading turbocharging division, Accelleron (formerly ABB Turbocharging), by way of a distribution of shares in Accelleron Industries Ltd to ABB shareholders. Accelleron plans to list on six Switzerland exchanges in Zurich on October 3, 2022, subject to, inter alia, the approval of ABB shareholders at an extraordinary general meeting scheduled for September 7, 2022.

The proposed Acceleration Dragon spin-off is a unique opportunity for both companies to focus on their respective core strategies and create long-term value for their stakeholders. ABB's shareholders will be able to realize the full value of Accelleron, while ABB will continue to streamline its product portfolio and focus on the megatrends of electrification and automation. Accelleron will be able to focus on reaching its full potential in the large engine industry, with a company known as a market leader in heavy-duty turbocharging, with compelling growth prospects, high cash generation and an attractive expected dividend policy.

Björn Rosengren, CEO of ABB, commented: "After careful consideration of the two-track process involved, we concluded that the spin-off of Accelleron was the best way forward – for Accelleron itself and for ABB's shareholders. This decision is also a key part of ABB's active portfolio management, while enabling our shareholders to actively participate in the future development of the Switzerland champion. ”

The global market leader in turbocharging

Accelleron's potential stems from its long track record as a global market leader in heavy-duty turbocharging for mission-critical applications.

Accelleron develops, manufactures and services turbochargers and large turbocharged components for engines that enhance propulsion and improve fuel efficiency while reducing emissions. Its leading products support customers in the marine, energy and rail sectors, helping to provide sustainable, reliable power and maximum efficiency. Accelleron has an installed base of more than 180,000 turbochargers worldwide and delivers approximately 10,000 turbochargers annually.

These turbochargers are manufactured, sold and serviced by Accelleron's approximately 2,200 employees through its network of 100 service stations in approximately 50 countries. The business has a significant and growing presence in key mature and growth markets in Asia.

Accelleron is considered best-in-class when it comes to reducing fuel consumption, improving emissions, and the green image of customer applications. As customer pressure to decarbonize increases, the company's superior technical capabilities are becoming increasingly important and will continue to be so, as its turbochargers can also be used in alternative and low-carbon fuel applications and drive systems.

A strong financial position can be used to invest in growth and reward shareholders

Accelleron's technological advantage is underpinned by market-leading R&D investments, which accounted for approximately 7% of its revenue in 2021. Following the spin-off, the company expects its strong financial position to keep it at the forefront of innovation by continuing to invest in R&D and strengthening partnerships with OEMs and end-users, as well as providing attractive returns to its shareholders.

In 2021, Accelleron generated revenue of $756 million with an operating margin of 25%. These results include flexible services revenue, which accounted for approximately 75% of revenue in 2021. Accelleron is above the industry average and generates strong cash flow, with cash flow from operating activities of $163 million in 2021. This will enable Accelleron to adopt an attractive dividend policy.

Daniel Bischofberger, CEO of Accelleron, commented: "With the spin-off, we will be able to focus more on our own operations to meet our customers' critical high-power propulsion needs while helping them achieve their environmental goals. Our strong track record and financial position position the business as a leader in the energy transition, developing cutting-edge products and services – now and in the future; At the same time, we provide remuneration to our shareholders. ”

Accelerate the dragon leader

Following the spin-off, Accelleron will be served by an experienced leadership team with deep and enduring expertise in turbocharging.

CEO Daniel Bischofberger and CFO Adrian Grossenbacher are members of the Executive Committee. Accelleron's designated Chairman of the Board of Directors will be Chairman Oliver Riemenschneider, who has more than 35 years of industry experience and has been CEO of ABB Turbocharging since 2011. He will be made up of diverse and experienced directors, namely Monika Krüsi, Gabriele Sons, Bo Cerup-Simonsen, Stefano Pampalone and Detlef Trefzger.

Deal structure

If the spin-off is approved at the EGM and its conditions precedent are met, ABB will distribute to its shareholders a pro-rata dividend of 1 Accelleron share out of 20 ABB shares as a dividend in specie. More information on the structure of the transaction and other important dates related to the spin-off will be provided in the invitation letter for the convening of the extraordinary general meeting and in the shareholder information brochure prepared by ABB on the process.

On August 31, 2022, ABB scheduled a Capital Markets Day focused on Acceleration Dragon to provide more information about the company and the deal.

ABB has engaged Switzerland Credit and Goldman Sachs International as exclusive financial advisors for the transaction. Credit Switzerland will act as listing agent.

Accelleron is a global leader in turbocharging technology and optimization solutions for 0.5 to 80+ MW engines, helping to deliver sustainable, efficient and reliable power to marine, energy, rail and off-highway sectors. Through its innovative products and research leadership, the company accelerates the decarbonization of its industry. Accelleron has an installed base of approximately 180,000 turbochargers and a network of more than 100 service stations in 50 countries around the world

ABB will divest its Accelleron turbocharging business

ABB will divest its Accelleron turbocharging business

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