NEXTracker, a designer and builder of single-axis PV trackers, just got bought by Flextronics for $330 million, including an $85 million earnout.
Flextronics said in a release, “The addition of the leading-edge NEXTracker business, along with its chairman and CEO, Dan Shugar, and his team, will further expand Flex’s solar capabilities in commercializing smart and connected energy technologies.”
This is CEO Dan Shugar’s second major solar acquisition. He helmed Powerlight when it sold to SunPower in the early days of solar. Nancy Pfund, an investor in NEXTracker at DBL Investors, was also an investor in Powerlight when she worked at JPMorgan.
NEXTracker will operate as a subsidiary, keeping its brand under the leadership of Shugar.
“Under the terms of the agreement, the initial cash consideration will be approximately $245 million, net of cash acquired, with an additional $85 million of potential contingent consideration upon achievement of future performance targets,” according to a release.
Last year, NEXTracker announced a $25 million B round led by new investor SJF Ventures, along with Tennenbaum Capital Partners and existing investors Sigma Partners and DBL Investors.
NEXTracker CEO Shugar left the CEO position at Solaria to spin out the tracker firm in 2013 after a year of incubation within the PV module maker.
Shugar told GTM in a previous interview, “I don’t know anyone who has ramped a company as fast as we have.”
He said, “We delivered about 275 megawatts in 2014…but this year will be well north of 1 gigawatt.” He also told GTM that production capacity is being ramped to 200 megawatts per month. The trackers can be built in the U.S., Asia and Europe, with multiple suppliers in each product category.
That manufacturing structure makes Flex a common-sense choice for acquirer.
Nancy Pfund, a partner at DBL Investors and a board member at NEXTracker, told GTM, “As we’ve seen over the past year or two, solar hardware is having an investment moment. Any companies that drive down costs and/or increase performance (think Zep and Silevo) are in a position to be attractive as the industry grows and industry players look for ways to increase system profitability. NEXTracker fits squarely in this space, as tracking systems can boost the economics of ground-mount solar farms in a significant way”
Pfund added, “Everyone knows that the global PV industry is growing fast, but many people don’t know that utility-scale systems are growing fastest, and that trackers are one of the fastest-growing PV applications, with 17 percent of global PV installed on trackers in 2013, projected to grow to 27 percent for 2017. In fact, NEXTracker is one of the fastest-growing companies in our portfolio.”
Shugar notes, “NEXTracker’s unimpeded row design also provides valuable cost savings for panel cleaning in the dusty Chilean desert, and minimizes site-grading requirements.”