SunPower sells O&M unit to Canadian investor as Maxeon spin-off is approved

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Image credit: SunPower

SunPower has made progress with two consequential transactions meant to redraw its business lines, a refocusing gathering steam as the firm braces for a slowdown this quarter.

In recent days, it emerged that the firm has now sold its O&M unit to Clairvest Group, a private equity investor headquartered in Toronto. The valuation of the unit and other financial terms of the sell-off have yet to be disclosed by either party.

Under its new financial owner, SunPower’s O&M business will rebrand to NovaSource Power Services. The new player will be co-owned by its current management team, who will become NovaSource’s “material” shareholders alongside Clairvest itself.

In a statement, Clairvest laid out its plans for NovaSource, a group already servicing nine countries at the time of writing. SunPower’s hitherto O&M unit will follow a so-called buy-and-build strategy, typically used by businesses working to expand by purchasing rivals.

Jack Bennett, SunPower’s former O&M head and NovaSource’s new CEO, said private equity outfit Clairvest will back the new firm as it strives to “capitalize” on the current tailwinds, including the “expected growth of installed solar assets over the next ten to fifteen years.”

China endorses Maxeon spin-off as factories restart

For SunPower, the O&M unit sell-off came as another of its high-profile moves – the spin-off of its manufacturing operations to new listed entity Maxeon Solar Technologies – was endorsed by Chinese regulators.

In recent days, SunPower announced its new partner for Maxeon, Tianjin Zhonghuan Semiconductor Co. (TZS), had secured the go-ahead from China's State Administration for Market Regulation, paving the way for the deal to complete before the end of Q2 2020.

As noted by SunPower CEO Tom Werner, the regulatory green light brings the firm’s planned split “one step closer” to fruition. China's endorsement clears the way for silicon wafer business TZS to invest US$298 million of equity in Maxeon, the firm said.

The reshuffle of SunPower’s core business lines comes after the firm posted a relatively strong Q1 2020 result despite the COVID-19 crisis. In line with Sunrun, Vivint Solar and others, the firm expects however to feel the impacts from the pandemic more keenly in Q2 2020.

This coming quarter, the firm is predicting GAAP net losses of US$100-120 million and a drop of MW additions and revenues compared to Q1 2020. As CEO Werner noted, however, the factories idled earlier this year will all restart “in the coming weeks.”

PV Tech has set up a dedicated tracker to map out how the COVID-19 pandemic is disrupting solar supply chains worldwide. You can read the latest updates here.

If you have a COVID-19 statement to share or a story on how the pandemic is disrupting a solar business anywhere in the world, do get in touch at jrojo@solarmedia.co.uk or lstoker@solarmedia.co.uk.

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