The core company is Tower Tech System, which builds wind turbine towers in Manitowoc, Wisconsin. It has been traded on the Over the Counter market in the US since 2005. In early 2007, a share buyout and infusion of cash from Connecticut-based Tontine Capital Partners positioned Tower Tech to start acquisitive growth. "It's been around a long time and just laying there under the radar. Things got cooking here in late 2007 and now in 2008," says Broadwind's CFO, Matt Gadow. Broadwind, he says, is the only publicly traded pure-wind player in the American market today. "The vast majority of our business is serving the wind industry...somewhere near 92%."
In recent months Tower Tech added three companies to form Broadwind. Brad Foote Gear Works makes gear sets for wind turbine gearboxes at three US locations. RBA, a heavy welding and machining fabricator in Manitowoc, Wisconsin, makes bases and crawler sections for cranes. And Energy Maintenance Service (EMS), based in Gary, South Dakota, runs wind farm services in a dozen states.
"Our concept is to close the holes in the supply chain," says Broadwind's Cam Drecoll. "Each company we acquire has the ability to double or triple in size and our capitalisation plan for each of these platforms is extremely aggressive. We're buying them specifically to grow them." He would not comment on the cost or financing of the acquisitions.
Tower Tech specialises in towers for 2 MW turbines and is among a handful of major US suppliers of that particular part. Last month Broadwind announced a framework deal with Gamesa for its North American projects. Drecoll declines to specify quantities, but says Tower Tech will supply towers for 1000 MW of wind capacity this year, representing about one-sixth of expected wind turbine installations.
"The bigger towers seem to be our sweet spot," Drecoll says. "It might look easy but it's quite complex. A lot of people have gone into the business, but a lot of people have backed out of it. Everything's got to be 100% perfect because you can't stand one of these things up and have a flaw."
Brad Foote makes gear sets at two Illinois locations before sending them to Pittsburgh, Pennsylvania, for heat treatment that hardens the steel. The company runs 15 gear-grinding machines and expects to add another ten in coming months. The backlog of orders for gearboxes in the wind industry is currently around two years. Brad Foote will produce gearboxes for roughly 2500 MW of wind turbines from factories operating 24 hours a day, seven days a week.
"We are by far the largest in North America," Drecoll says of Brad Foote. "But it's like having a tiger by the tail. You really have to hold on because our customers are so dependent on us." One of those is GE. In March, Brad Foote secured a three year contract to provide gear sets to GE Transportation, which turns them around for use in wind turbine gearboxes for GE Energy.
EMS assists in wind turbine erection and performs scheduled and unscheduled maintenance in addition to providing safety training. The South Dakota facility has trained some 650 technicians in the last 18 months, a third of which are EMS employees. "With so many turbines going up and so many people getting involved, there's a great safety risk," Drecoll says. "And one thing that really attracted us to EMS was their training capabilities."
Part of Broadwind's acquisition strategy is to tie its assets together. In April the company announced plans to open a wind energy training, maintenance and service centre in Abilene, Texas. The 10,000 square-metre facility will provide repair, retrofitting and remanufacturing of wind turbines and other major components. More than 80 new jobs will be created and the facility is expected to be fully operational by next spring. "We will be doing blade and gearbox repairs down in Texas," Drecoll says. "That's where we'll have the tie-in between Brad Foote and EMS. Brad Foote can make the gears, EMS can bring down the transmissions, repair them and put them back up."
Meanwhile, as Broadwind's ranks have climbed to 800 employees across the US, Drecoll is only too aware of the one component shortage affecting the entire industry. "I think the biggest concern that everyone has is the shortage of bearings," he says. "That's a difficult thing for not only the gearboxes but also for the turbines. But we're currently not involved."