The following article is from Bloomberg View.
(Credit: Bloomberg View)WALSH CONSTRUCTION CORPORATION, a global manufacturer of turbine blades, is in talks with investors to buy up the company’s stake in wind power companies including Windmill Renewable Energy and Windpower Solutions, according to people familiar with the matter.
The investment could be worth between $3 billion and $5 billion, the people said, asking not to be identified because the discussions are private.
The company’s stock, which was up more than 40 percent on Friday, has fallen nearly 80 percent this year, driven by concerns over the lack of regulatory certainty and a surge in demand for wind power.
The company will not have to go through a stock offering and its stock could trade for less than $3 a share.
The companies could sell their shares for a premium, the person said, declining to provide further details.
The deal would give Walsh more time to negotiate terms, and it would also give investors a way to hedge their bets.
Walsh has not disclosed the size of the stake it is considering, although one person familiar with its thinking said the deal would be for between $1 billion and 100 million shares, depending on how Walsh develops the business.
WALSCH’S HISTORY The company was founded in 1986 and is based in San Diego, California.
In 2006, the company purchased the Windmill Energy division of Windmill Holdings Inc., a wind energy company in Nevada, for $1.6 billion.
It was spun off the next year into a new company, Windmill Solutions, which made wind power equipment for companies including the National Grid, the Department of Energy, the California Public Utilities Commission and the California Department of Forestry and Fire Protection.
Windmill Solutions also makes turbine blades for a range of companies, including the U.S. Navy, the Army, the National Guard, the Marine Corps and the Air Force.
The company is a pioneer in wind turbine design, and the blades are used to power the nation’s power plants.
The business has more than 100,000 employees worldwide.
In 2011, Walsh acquired Windmill and its other business, Windpower Systems Inc., which is a maker of blades and other gear for wind turbines.
Earlier this year Walsh spun off Windpower Renewable, the wind energy division of the company, and in February, it bought Windmill.
The new company is expected to have a turnover of about $10 billion this year.