A Blank Check Powers Up for the Future

Investing in so-called "blank check" companies is a risky proposition, to say the least. After all, these startups have no operating assets (and no guarantee they will find any), no products, no services, no staff.

Blank-checks are created with the sole purpose of acquiring an operating business with shareholders' capital. Commonly known as SPACs (special-purpose acquisition companies), they are essentially empty shells hoping to buy to-be-determined businesses with the proceeds from their initial public offerings of shares.

One blank check that is no longer so blank is Germany1 Acquisition Limited (AMS:GAL1S), a Netherlands-based company formed to scout for potential investments in Germany, Austria and Switzerland. The firm last September invested about US$760 milllion to acquire AEG Power Solutions B.V., a manufacturer of uninterruptible power supplies (UPS) and provider of products and services related to Direct Current (DC) systems for telecommunications and other applications.

Headquartered in Germany, AEG PS has operated for more than 65 years and employs 1,600 people in 16 countries, including the United States. The company specializes in highly engineered power electronics solutions for industrial, infrastructure and renewable energy applications. One of its fastest-growing business lines is supplying power controllers to manufacturers of polysilicon, which is used to make solar cells.

Long a force in the European and Asia-Pacific markets, the company is now eyeing North American expansion. AEG PS currently provides back-up power systems to nuclear facilities in several Canadian provinces and Quebec's hydro power plants. Its products are also used in oil refineries, manufacturing facilities, mass transit, data centers and office buildings throughout the United States.

The firm, which recently announced plans to make its solar energy solutions available in the United States and Canada, is beefing up staff for its offices in offices in Dallas, Texas and Markham, Ontario, with the goal of providing smart-grid-compatible solar panels and inverters, and control, monitoring, diagnostics and communications equipment.

"In today’s business environment, companies are beginning to hold themselves accountable for their own carbon footprint and the ‘greening of their business’ while striving to reduce long-term costs," said Robert J. Huljak, chief strategic officer, in a statement.  "AEG PS is proud and confident about bringing our capability and system solution strategy to the North American market. AEG Power Solutions also looks forward to enabling smart grid applications with our intelligent and rugged power electronic solutions."

Its holding company, Germany1 Acquisition Limited, has started the process of changing its name to 3W Power Holdings SA, with a new ticker symbol, 3WP, to be listed on Euronext, Amsterdam.

Considering the Obama administration's cleantech ambitions and Canada's commitment to green energy initiatives, the company's moves are well worth watching.

Image courtesy of AEG Power Solutions