Canadian Solar Inc. (NASDAQ: CSIQ) announced that it had entered into a definitive agreement with Sharp Corporation to acquire Recurrent Energy. The transaction is valued at $265 million. Canadian Solar is getting a good deal out of this as it is paying 13% less than the amount Sharp paid for Recurrent five years ago.

Sharp originally paid $305 million for Recurrent Energy in 2010. The sale of Recurrent to Canadian Solar will be completed in March.

Following the transaction, Canadian Solar’s total solar project pipeline will increase from roughly 4.0 GW to 8.5 GW, and its late-stage project pipeline will increase by 1.0 GW to 2.4 GW.

Recurrent Energy has 1.0 GW in its late-stage pipeline, which is one of the largest utility-scale project portfolios, scheduled to be built prior to the investment tax credit expiration in 2016. It also represents an estimated revenue opportunity of at least $2.3 billion for Canadian Solar under a build-and-sell business model.

Recurrent Energy was founded in 2006 and has developed and sold over 520 MW of solar projects. The company has a project pipeline of 3.3 GW and 1.1 GW in signed contracts.

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This transaction would further solidify and expand Canadian Solar’s position as a leading solar energy developer, with a globally diversified project pipeline in low risk geographies.

Dr. Shawn Qu, chairman and CEO of Canadian Solar, said:

By combining Canadian Solar’s global reach and experience with Recurrent’s proven solar energy development track record in the US and Canada, we are significantly expanding the scale of our solar energy development platform. At the same time, this transaction broadens our strategic options to extend our business model from development and construction into potential ownership and operation of solar power plants as we work to create additional value for our shareholders.

Shares were up 24% at $26.53 in the last two hours of Tuesday’s trading session. The stock has a consensus analyst price target of $42.46 and a 52-week trading range of $18.68 to $44.50.

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