Nextracker is to be spun out from parent company Flex after it secured a US$500 million equity sale, valuing the business at around US$3 billion.
Manufacturing group Flex had been assessing its options regarding the tracker manufacturer for some time, having previously filed documents paving the way for a prospective initial public offering (IPO).
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Nextracker will now begin its spin-out process from Flex after the parent group agreed to sell US$500 million of convertible preferred equity to the climate investment arm of investor TPG Rise.
As part of the deal, Flex and Nextracker have entered into a separate agreement which will see the latter transition to become a separate business. Flex said it will report Nextracker as a separate operating segment in the future.
A potential IPO does, however, remain on the table for Nextracker, with Flex CEO Revathi Advaithi stressing the company would “evaluate the right time to do a transaction”. TPG’s stake in Nextracker is to convert into common equity of the business when a qualified offering takes place.
As part of the stock sale, TPG vice chair Jonathan Coslet and TPG Rise business unit partner Steven Mandel will join the Nextracker board.
TPG Rise brings with it experience of investing in renewable energy businesses, having financed and launched developer Matrix Renewables and invested in energy storage business Form Energy.
More to follow…