OEM giant Flextronics has acquired tracking manufacturer NEXTracker in a deal that could be worth up to US$330 million.
NEXTracker’s biggest customer, SunEdison, outsources its module manufacturing to Flextronics, creating obvious opportunities for a further deepening of that relationship.
“This acquisition aligns well with our strategy of acquiring technologies that deliver innovative, value-added solutions to our customers in industries with strong growth rates and higher margins,” said Mike McNamara, CEO of Flextronics. “Together with our existing energy capabilities, the NEXTracker solutions will enable Flex to further enhance our sketch-to-scale solar offerings.”
“Our strong, free cash flow generation enables margin-accretive acquisitions like this to be completed, while at the same time allowing us to remain committed to maximising shareholder value through returning over 50% of free cash flow to our shareholders.”
The deal is expected to close in December for US$245 million of cash up front with a further US$85 million of add-ons based on future performance.
NEXTracker will retain its brand and operate as a subsidiary, with current chairman and CEO Dan Shugar staying on.
“Joining Flex will enable NEXTracker to accelerate its growth while leveraging our best-in-class, innovative technologies, and a shared passion for advancing the future of renewable energy,” said Shugar. “Flex has a solid global infrastructure, an experienced team, and world-class capabilities that will allow us to scale our solar solutions and help take our business to the next level.”
Earlier this year market research firm IHS placed NEXTracker fourth in its global ranking of tracker suppliers, behind the likes of First Solar and Array Technologies. But IHS analyst Cormac Gilligan predicted NEXTracker could rise up that list as a result of its expansion plans.
“Not only has NEXTracker been a successful preferred supplier of trackers for SunEdison, a leading global EPC player, the company has really embraced the global PV market by shipping its trackers to Chile, Australia and other international markets outside of the United States,” Gilligan said.