Wedoany.com Report-Jan 10,Virginia Transformer Corp. is exploring a sale that could value the US transformer manufacturer at more than $6 billion, people familiar with the matter said, amid soaring demand for electricity.
The Roanoke, Virginia-based company is working with an adviser as it seeks to gauge buyer interest, according to the people, who asked not to be identified discussing confidential information.
Deliberations are ongoing and there’s no certainty that Virginia Transformer will decide to proceed with a sale, the people said. A representative for Virginia Transformer declined to comment.
Led by Chief Executive Officer Prabhat K. Jain, privately-owned Virginia Transformer traces its roots back to the early 1970s and is the largest US-owned manufacturer of power transformers in North America, its website shows. Its products are used in locations ranging from steel mills to data centers.
US demand for electricity will surge almost 16% over the next five years, driven by new data centers and factories that are going to suck up power, according to a December report from Grid Strategies. That strong demand is expected to require an upgrading of aging electrical infrastructure, potentially making companies like Virginia Transformer attractive takeover targets.
Hitachi Energy, the world’s largest producer of transformers, in November warned that the industry is “overwhelmed” and unable to meet exploding demand for grid equipment. Other big peers include GE Vernova Inc., HD Hyundai Electric Co. and Schneider Electric SE.
A benchmark for deals in the sector is the 2018 acquisition of ABB Ltd.’s power grid division by Japanese group Hitachi Ltd. at a valuation of $11 billion including debt.
Transformers, devices which help transfer electric energy from one source to another circuit, are a critical component for electricity production and distribution. Their supply has lagged growing demand, according to previous research from Wood Mackenzie, resulting in higher prices and longer wait times.
The volume of industrial products and services deals slipped 3% to about $516 billion in 2024.
