Array to buy fellow solar tracker maker STI Norland in EUR-570m deal

Array Technologies Inc (NASDAQ:ARRY) has agreed to acquire Spanish competitor Soluciones Tecnicas Integrales Norland SL, also known as STI Norland, in a deal the buyer says will create the largest solar tracker company in the world.

Array will pay EUR 570 million (USD 652m) in cash and stock to take over STI Norland, according to the announcement on Thursday. The US company has secured commitments from JP Morgan Securities LLC and Guggenheim Securities LLC as joint lead arrangers for bridge financing to possibly cover the cash portion but noted it will pursue certain other debt financing alternatives for this purpose.

Pamplona-based STI Norland is a solar tracker maker with a footprint in Iberia and Latin America. To date, the firm has completed or been awarded orders for over 400 projects around the world exceeding 12 GW of total generation capacity. Last year, it recorded revenues of about EUR 200 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR 43 million.

The Spanish firm’s purchase by Array will help the latter accelerate its expansion into international markets and provide it with a strong manufacturing presence and supply chain in Brazil, an additional sales channel, new major customers and a stronger relationship with some existing ones, as well as a broader product portfolio.

“The combination of Array and STI Norland creates the global leader in trackers with leading positions in every major market for solar outside of China and India,” said Brad Forth, chairman of Array, adding that the acquisition will also create opportunities for significant cost reduction.

The combined business is seen to generate over USD 200 million (EUR 175m) of adjusted EBITDA in 2022 before synergies.

The transaction is awaiting regulatory clearance and is seen to wrap up in the first quarter of 2022. STI Norland’s existing senior management will continue to run the business after that.

(EUR 1.0 = USD 1.145)

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