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Flex has entered into a definitive agreement to acquire NEXTracker, a leader in smart solar tracking solutions. NEXTracker designs and manufactures one of the world's most advanced single-axis photovoltaic (PV) trackers that orients PV panels to maximize energy output. The acquisition will augment the Flex Energy business and contribute to its more than $1 billion in sales, and is expected to be accretive to Flex's growth, margin, EPS and cash flow generation.
NEXTracker has achieved significant industry breakthroughs in smart and connected tracking solutions that deliver high performance and flexibility for solar power plants of all sizes. It delivers a cost-effective solution to maximize solar project returns for its range of global customers that include developers, energy procurement construction companies, and system owners of ground-mounted solar power plants.
"This acquisition aligns well with our strategy of acquiring technologies that deliver innovative, value-added solutions to our customers in industries with strong growth rates and higher margins," said Mike McNamara, CEO of Flex. "Together with our existing Energy capabilities, the NEXTracker solutions will enable Flex to further enhance our sketch-to-scale™ solar offerings. Our strong, free cash flow generation enables margin-accretive acquisitions like this to be completed, while at the same time allowing us to remain committed to maximizing shareholder value through returning over 50% of free cash flow to our shareholders."
"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," said Doug Britt, president of Industrial and Emerging Industries at Flex. "NEXTracker's advanced solar tracking solutions, along with Flex's experience in the energy sector, solar manufacturing and our global reach, will provide valuable and scalable system-level solutions for our energy customers worldwide, improving their competitive offering."
"Joining Flex will enable NEXTracker to accelerate its growth while leveraging our best-in-class, innovative technologies, and a shared passion for advancing the future of renewable energy," said NEXTracker's Shugar. "Flex has a solid global infrastructure, an experienced team, and world-class capabilities that will allow us to scale our solar solutions and help take our business to the next level."
Upon completion of the deal, NEXTracker will operate as a subsidiary, retaining its existing brand under the continued leadership of Dan 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. Flex will also assume an equity incentive plan. The acquisition is expected to close early in the December 2015 quarter, subject to customary closing conditions, and contribute between $80 million and $120 million in revenue for the December quarter. Flex intends to fund the acquisition from currently available resources.
Flextronics International Ltd. (Reg. No. 199002645H) is a leading sketch-to-scale™ solutions company that designs and builds intelligent products for a connected world. With more than 200,000 professionals across 30 countries and a promise to help make the world Live smarter™, the company provides innovative design, engineering, manufacturing, real-time supply chain insight and logistics services to companies of all sizes in various industries and end-markets.
NEXTracker™, designer and manufacturer of the world's most advanced single-axis PV trackers, offers a significant breakthrough in horizontal tracking, with lower costs, better performance and more flexibility for solar power plants of all sizes. These benefits increase solar project profits for developers, EPCs and system owners. Leveraging world-class design and installation expertise, NEXTracker has delivered trackers for dozens of projects, across five continents. Headquartered in Fremont, California, NEXTracker is one of the fastest growing clean technology companies.