COMMENTARY BY ALAN M ROSS,
EDITOR IN CHIEF
The sale of some of the assets from Pioneer to a private equity firm is interesting and important for several reasons.
First, the market demand for new transformers has been and will continue to heat up, since the average age of power transformers is over 35 years old in the US, and likely the same in Europe and South America. Bill Bartley retired from Hartford steam boiler several years ago and Bill, as the head of the IEEE Transformer Committee for years, had written that the demand would increase in the late 1990s and early 2000s, based on the estimated remaining life of power transformers. That demand did not come until 2010 and has been heating up ever since.
There is also greater demand for more and larger dry-type transformers (see the June issue of our magazine, The Dry-Type Revolution). With demand increasing, that has increased the value of that business units that Pioneer is selling. Timing is everything.
To make this an even more interesting transaction is the remaining focus on several businesses that will continue to grow. Both parties have done well in this transaction and the industry is better served by it.