US solar panel maker SunPower Corporation (SunPower) yesterday agreed to acquire SunRay Renewable Energy (SunRay), a leading European solar power firm for approximately $277 million, aiming at expanding its activities in Europe and the Middle East.
SunPower will acquire SunRay from its shareholders, which include its management and Denham Capital, a leading global private equity firm, for $235 million in cash and $42 million in a letter of credit and promissory notes.
The transaction is expected to close in the first half of 2010, subject to customary and regulatory approvals.
SunPower said that the acquisition will be funded using the company’s internal resources. Specific financial guidelines regarding the impacts of the acquisition of SunRay will be presented in March, during the company’s fourth quarter earnings conference.
The transaction will enable SunPower to acquire a project pipeline of solar photovoltaic projects totalling over 1,200 MW of power in southern European countries and Israel. The projects are in various stages of development and about 70 SunRay employees are associated with their financing and implementation.
Both the companies have worked together on several solar energy projects including the large 24-MW power plant Montalto in Italy.
Sanjose, California-based SunPower designs and manufactures high-performance solar electric systems worldwide for residential, commercial and utility purposes. Its energy-efficient solar systems generate up to 50 per cent more power than conventional solar technology. The company reported revenue of $1.4 billion in 2008.
In October, the company commissioned the 25-MW DeSoto solar power plant in Florida, the largest photovoltaic plant in North America.
Malta-based SunRay is an independent solar power producer with broad skills across the photovoltaic project development value chain including engineering, legal and project finance capability in strategic partnership with Denham Capital, a private equity firm. The company focuses on utility-scale projects and has offices in Italy, Greece, France, Spain, the UK and Israel.
SunRay is well positioned to deploy over €1 billion capital in the next 3 years, according to the company website.
“This acquisition is consistent with our long-term company strategy to develop a strong brand and complementary channels to market,” Howard Wenger, president of SunPower’s utilities and power plants business group said.
”SunRay’s exceptional team and pipeline will add to our significant internal investment in North American power plant development.” ”It also complements our European engineering, procurement and construction business that serves a broad range of development partners,” Wenger added.
SunRay Group CEO Yoram Amiga said, ”Our experience working with SunPower on Montalto and several other power plants in Italy convinced us that SunRay will be joining the global solar technology, performance and quality leader for solar power plants.
Amiga further said that the combined experience of the companies would offer their customers reliable energy delivery at competitive prices.
JP Morgan Securities Inc acts as the financial advisor to SunPower for this transaction.
The global economic downturn had badly hit project financing and demand for solar energy products as well. However, the industry has started seeing some signs of revival and hopes that the business opportunities will grow through 2010.
