- Array Technologies will acquire STI Norland of Spain, thus increasing its international presence
- Transaction value is a total of around €570 million in cash as well as stock, and expected timeline for deal completion is Q1/2022
- Their combined order book as of September 30, 2021 stood at over $1.4 billion
- STI Norland’s geographical reach beyond the US and its business relationships with some of the big players will help Array, the latter’s management stated
US based solar tracker manufacturer Array Technologies, Inc. has announced the creation of the world’s ‘largest’ solar tracker company after entering a definitive agreement to acquire its Spanish counterpart Soluciones Técnicas Integrales Norland (STI Norland).
“The combined business will have leading positions in North America, Latin America and Europe, the three largest markets for solar outside of China. With manufacturing capacity and design and engineering resources on three continents, the combined organization’s ability to support customers on a global basis will be unparalleled,” explained Array.
The deal has been finalized for close to €570 million in cash and stock and is expected to close in Q1/2022. STI Norland will continue to be managed by the company’s senior management team under CEO Javier Reclusa.
So far, STI Norland has supplied its trackers for over 400 projects globally, representing more than 12 GW in generation capacity. Its order book comprising executed contracts and awarded orders, as of September 30, 2021 added up to $416 million. On the other hand, Array has shipped over 30 GW capacity globally and its order book amounts to $1 billion.
Altogether, the shipped or awarded capacity for both the companies is equivalent to 23% of the installed utility scale capacity in North America, Europe, Latin America and Australia, according to Array’s estimates.
Array said it will be able to accelerate its expansion plans for international markets by using STI Norland’s existing sales infrastructure and relationships since the latter has an established presence in Europe, Latin America, Australia and South Africa. In Brazil alone, Array sees an opportunity since STI Norland is the leading provider of solar trackers here. STI Norland earns 95% of its revenues from outside the US.
Through the Spanish company’s business relationships with big players as Iberdrola, Acciona Energia and EDP Renewables, Array believes it will be able to increase sales to these customers within the US and internationally.
“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. STI Norland brings to Array a proven product line that is ideally suited for complementary markets which will help to accelerate our international expansion plans,” said Array Chairman Brad Forth.
The US manufacturer expects combined business of the 2 companies to generate more than $200 million of adjusted EBITDA in 2022, with close to 30% of the revenues coming from international projects next year.
Once the transaction completes, Array said it will initiate several cost reduction plans across the combined company, including evaluating additional supplier discounts.
Jeffrey Osborne of Cowen sees the development as a positive for Array. He said, “We like the strategic rationale of honing in on trackers and diversifying outside the U.S. Brazil is a compelling market in our view, albeit with currency and political risk.”
Array’s decision to acquire STI Norland comes after it secured up to $500 million capital from Blackstone Energy Partners in August 2021 (see Revenue Up, Gross Margin Down For Array Tech. In Q2/2021).
In April 2021, TaiyangNews held a virtual conference on solar trackers with leading tracker makers participating. On the occasion, we launched our 1st Market Survey on Solar Trackers which is available for free download here. Details of the video presentations and conference summary is available on our website.