STR Holdings publicized the definitive purchase agreement it had signed with Underwriters Laboratories (UL), where UL will buy STR’s quality assurance (QA) business for US$275 million in cash, plus cash assumed. The acquisition is expected to be finalized no later than September 30 once all traditional closing conditions have been met.
STR has been known for the production of its performance encapsulants under the trade name PhotoCap for the solar module industry. Dennis Jilot, STR chairman, president and CEO stressed the company’s desire to focus more on the PV side of the business and advised that the deal with UL would allow STR Holdings’ corporate leadership to focus 100% on solar.
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“STR QA is a leader in the consumer products quality assurance market, contributing significantly to the success of STR Holdings over the years,” said Jilot. “However, our solar encapsulant business has grown to be a leader in the rapidly growing photovoltaic industry. We believe that divesting the QA business increases shareholder value at STR Holdings, since it will enable us to focus exclusively on the solar market, strengthen our balance sheet, and provide greater financial flexibility to pursue growth strategies for our solar business. The proposed transaction provides full and fair value for the QA business and a meaningful return to our investors for this valuable asset.”
The agreement will see UL take over STR’s QA business, including its employees, facilities, contracts and intellectual property. STR advised that funds from the deal, as well as part of its existing cash, will go towards withdrawing its outstanding credit facilities.
STR Holdings’ QA unit will now be reported as a discontinued operation. The company has been required to revise its historical consolidated net sales and non-GAAP EPS to add the change to its income statement classifications.