Enphase Energy Jumps on SunPower Microinverter Acquisition

Energy

Published: June 13, 2018 9:56 am

Last Updated: January 11, 2020 10:24 pm

Enphase Energy, Inc. (NASDAQ: ENPH) saw shares up sharply on Wednesday after the firm announced that it would be acquiring SunPower Corp.’s (NASDAQ: SPWR) microinverter business. The transaction is expected to close at the end of the third quarter of 2018.

According to the deal, Enphase will acquire SunPower’s microinverter business for $25 million in cash and 7.5 million shares of Enphase common stock.

Some of the key highlights of the acquisition include:

Advances AC Modules (ACM) as the future of residential solar

Enhances SunPower’s Equinox Home Solar System with a custom line of Enphase’s IQ microinverters for use with SunPower AC Modules

Enphase expects to add $60-$70 million annualized revenue in second half of 2019 at 33%-35% gross margin

Adds over 140 patents to Enphase’s strong IP portfolio

Expects to close by end of the third quarter of 2018 with initial IQ shipments in the fourth quarter

$25 million cash to be funded from Enphase’s balance sheet in two installments

Badri Kothandaraman, President and CEO of Enphase, added:

We are pleased to become the microinverter supplier for SunPower’s AC Modules. The IQ 7XS 320W AC microinverter in an ACM strongly complements SunPower’s high efficiency solar cells, communication and racking to create a high performance, high quality and easy-to-use Equinox Home Solar System, providing exceptional value to homeowners, dealers and architects.

Shares of Enphase closed Tuesday at $4.50, with a consensus analyst price target of $6.25 and a 52-week range of $0.76 to $6.37. In early trading indications Wednesday the stock was up about 32% at $5.95.

Shares of SunPower closed Tuesday at $7.86, with a consensus analyst price target of $8.13 and a 52-week range of $6.46 to $11.70. In early trading indications Wednesday the stock was up over 2% at $8.05.