Mitsubishi, Quanta, Private-Equity Player Add to Transformer Investment Boom

The push to add U.S. transformer and switchgear manufacturing capacity has gathered further steam this week thanks to a trio of announcements involving several big names.

Combined, the three news items appear to comprise more than 500 jobs and about $200 million. Here are their details.

• Mitsubishi Electric Power Products Inc. plans to invest about $86 million to build a switchgear factory in Western Pennsylvania that, once at full capacity, is expected to be home to more than 200 workers. The 160,000-square-foot plant will be Mitsubishi Electric Power Products’ first new facility in more than a decade and will focus at first on making vacuum and gas circuit breakers. Pennsylvania officials are backing the project with a combined $6.75 million in incentives from two programs.
   
• New York-based private equity firm Mill Point Capital is spending tens of millions of dollars to get in the transformer game by reuniting former sister businesses Pioneer Custom Electrical Products and Jefferson Electric, which had been divisions of Pioneer Power Solutions Inc. and ERMCO, respectively. To bring together the two ventures, Mill Point has former Voltaris Power LLC, which will be led by Justin Smith, Tom Klink and David Dolan.
   
  Mill Point paid $50 million for Pioneer Custom Electrical Products, which runs a 40,000-square-foot plants in Los Angeles and last year had revenues of about $30 million. Mill Point and ERMCO haven’t released terms of the deal for Jefferson Electric, which was also under the Pioneer umbrella from 2010 until 2019. ERMCO had owned Jefferson since late 2022 after buying Spire Power Solutions—from Mill Point. Jefferson employs more than 200 people and specializes in dry-type low- and medium-voltage transformers.
   
  “We are excited to bring these businesses together as Voltaris as it positions us for significant growth in the electrical infrastructure market, especially in the rapidly growing electric vehicle charging, microgrid and data center segments,” Justin Smith, Mill Point’s executive partner, said in a statement. “The leadership team of the combined business has deep industry expertise and experience that is expected to drive significant value for all stakeholders.”
   
• The third transaction announced this week comes from infrastructure services giant Quanta Services Inc., whose executives said they bought Niagara Power Transformer in September. Niagara has been around for more than a century and has sold its products—primarily liquid-filled power transformers—to customers in more than 80 countries. In filings, Quanta executives said the purchase was one of two they completed last quarter for a combined $87.9 million.
   
  Speaking to analysts Oct. 31 after Quanta reported its third-quarter results, President and CEO Duke Austin said the acquisition—which comes about a year after a similar deal for a Pennsylvania manufacturer—is essentially a backstop for Quanta that lowers the company’s production risks, particularly if a future president rolls out new tariffs.
   
  “The supply chain constraints are there. They’re real,” Austin said. “We’re trying to do things in the lower 48 with the load that we see and so I think we’ll continue to see ourselves get in a good position to make sure that we can have self-performed capabilities.”

These investments come shortly after a series of similar announcements aimed at adding manufacturing capacity to feed energy firms of all kinds as they look to build out U.S. infrastructure. Most recently, TMC Transformers USA Inc. said it will build a 110-job plant in Georgia and ERMCO said it will grow its West Tennessee home base through a multi-phase expansion that will eventually add 400 jobs.