Piller Buys Cash-Strapped Active Power

Piller, subsidiary of the British engineering and industrial giant Langley Holdings, has agreed to acquire Active Power, the US-based maker of electrical equipment, including to a large extent data center power infrastructure. Active Power is known for its flywheel-based UPS products.

The deal is a lifebuoy for Active Power, which has been having difficulty raising capital to sustain its operations. In a statement, Mark Ascolese, the Austin-based company’s CEO, blamed the situation on market conditions.

“The current capital market environment is very challenging, making it difficult to raise capital through traditional equity financing to support our current operations,” he said. “Langley is a proven, long-term investor and this deal enables us to avoid a costly liquidation process or further funding operations given our diminished cash balance.”

Terms of the transaction were not disclosed.

The deal is another sign of a shake-up taking place in the data center infrastructure market. Last year, the French electrical equipment vendor Legrand acquired Raritan, a New Jersey-based data center infrastructure vendor. This year, Emerson Electric spun off Emerson Network Power, its data center equipment subsidiary as part of a program to divest underperforming businesses.

Active Power has differentiated in the data center power equipment market with its flywheel-based energy storage technology for UPS systems. Flywheels are more environmentally friendly than led-acid batteries, the most commonly used UPS energy storage technology, but provide shorter runtime, which means a facility’s backup power systems have less time to fire up generators and stabilize in case of a utility outage.

While long enough for many data center operators, some of them – namely hyperscale cloud data center operators whose infrastructure investments are fueling the current data center market boom – don’t accept the 15 seconds of runtime Active Power’s previous-generation products offered. To expand its market opportunity, the company’s engineers have in recent years focused on extending runtime, first by combining flywheels with batteries and more recently by spinning flywheels faster.

Read more: Active Power Aims at Cloud Data Centers with Longer UPS Runtime

In addition to UPS systems, Active Power sells containerized electrical infrastructure solutions for data centers and other critical applications.

Piller, whom Langley acquired in 2004, also sells power protection equipment for mission-critical facilities, including data centers, airports, broadcasting buildings, and government departments. The century-old company is headquartered in Osterode, Germany, and has subsidiaries of its own elsewhere in Europe, as well as in the Americas, and Asia Pacific.

Langley, Piller’s privately-owned parent company, made $1.1 billion in revenue in 2015.

In a statement, Langley board member, Bernard Langley, said the company planned to keep Active Power’s current US operations in place. “The addition of Active Power’s differentiated flywheel UPS technology to Piller’s power protection portfolio will further strengthen its position in the market, creating more compelling alternatives to traditional UPS offerings for mission critical applications,” he said. “We plan to maintain Active Power’s manufacturing operations in Austin, further expanding our operating footprint in the United States with this acquisition.”