Soitec Group acquires Concentrix Solar

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Good Energies and Abengoa Solar, S.A. find a €34 million Concentrated PhotoVoltaic (CPV) exit.

Soitec expands into the fast growing solar energy market with the acquisition of Concentrix Solar, the leading provider of CPV solar systems for the industrial production of energy” (Deutsch) with the transaction closing Friday, December 11, 2009.

Soitec SA (EPA:SOI) CEO and President Dr. André-Jacques Auberton-Hervé commented on the announcement via a same day conference call (webcast replay available until December 18, 2009) joined by the Director of the Fraunhofer ISE Professor Eicke Weber and Concentrix Solar CEO Hansjörg Lerchenmüller. I recommend reviewing the longer version of the matched presentation, Soitec Enters Fast Growing Concentrated Photovoltaic Market.

From Soitec Enters Fast Growing Concentrated Photovoltaic Market

Soitec envisions accelerating the Cost Reduction and System Efficiency Roadmaps for CPV Systems through the combination of:

  • Concentrix Solar proven CPV system expertise
  • Fraunhofer ISE III-V solar cell technology
  • Extension of Soitec R&D partnership with CEA-Leti on engineered materials for III-V cell applications
  • Application of Soitec Smart CutTM engineered substrates, Smart StackingTM technologies, and III-V epitaxy expertise to optimize CPV systems

Soitec offers III-V products today for RF and microwave components through its Picogiga International division.

In “Soitec builds growth strategy on 4 pillars, says CEO” by Anne-Francoise Pele at EETimes.com from November 25, 2009, Soitec had already articulated Value Proposition #4 during the release of First half results 2009-2010:

Last but not least, Soitec unveiled its fourth proposition: To provide solutions based on III-V materials for the Concentrated Photovoltaic (CPV) market. This market, according to market research firm Emerging Energy Research, will represent 9 percent of solar PV market in 2020, and the market of PV modules will then reach $287 billion.

Soitec said it is working to enhance its SmartCut technology on III-V materials, to develop a highly efficient solar cell and to ensure that cost per watt in CPV is competitive over the next five years. For that, Auberton-Hervé specified, the company will see to collaborate and gain competencies in solar cells, modules and related systems.

From Soitec Enters Fast Growing Concentrated Photovoltaic Market

Concentrix Solar Financials
In a rare glimpse at start-up financials, Concentrix Solar expects 2009 revenues of €5.2 million (USD $7.6 million) representing 53% sales growth from 2008. Concentrix Solar has not announced a major installation in 2009. Since 2009 has been challenging for CPV firms, is the revenue a mix of new, unannounced installations, recognition of revenue from 2008 installations, and perhaps solar cell technology licensing revenue?

In the conference call, CEO Lerchenmüller mentioned Concentrix Solar had installed 600 kW (kiloWatt) of CPV systems in Spain, many more demo systems in the US, Spain, Italy, and Korea, and was executing on a very, very significant project pipeline.

From Soitec Enters Fast Growing Concentrated Photovoltaic Market

Transaction
Valuing Concentrix Solar at €55 million, Soitec is acquiring 80% of the company for about €34 million (USD $49.7 million) from major shareholders such as Good Energies. I confirmed Abengoa Solar was also bought out in the deal. Concentrix Solar has never disclosed funding amounts from Fraunhofer ISE, Good Energies, Abengoa Solar, or other sources.

The remaining 20% of Concentrix Solar is retained by minority shareholders including company founders and management along with Fraunhofer subject to put (minority shareholders) and call (Soitec) options based on exercise dates, revenue, and gross margin targets.

Post acquisition in January 2010, Soitec and minority shareholders will also fund a €20 million capital increase of Concentrix Solar.

Integration
As part of a the Soitec Group’s new photovoltaic business unit, Concentrix Solar management and operations will remain in Freiburg in close proximity to Fraunhofer ISE.

Concentrix Solar to expected to grow faster than the Soitec Group with a Compound Annual Growth Rate (CAGR) greater than 100% from 2010 to 2015 and break even in two to three years.

Dr. Auberton-Hervé said:

We are entering in the solar energy market at the time (the) Copenhagen summit is showing the direction that this world cannot avoid, to go more and more to renewable energy.

AZUR SPACE?
While Fraunhofer and Soitec to codevelop a new generation of III-V cell (the “Smart Cell”) is stated, it is unclear if Soitec will focus on engineered III-V substrate solutions only or also enter terrestrial, III-V multijunction solar cell production or both.

Where does that leave longtime Fraunhofer ISE III-V multijunction solar cell industrialization partner, AZUR SPACE Solar Power GmbH? Will AZUR SPACE become a Soitec partner, customer, or future competitor?

In this ICSC-5 17 November 2008 presentation, Gerhard Strobl discussed AZUR SPACE capacity and expansion plans:

  • Capacity in 2008: 100 MW in CPV
  • Planned capacity in 2011: 500 – 600 MW
  • Further capacities on customer’s demand based on long term agreements

Concentrix Solar has 25 MW (MegaWatt) of annual CPV module production capacity in place with rapid expansion to 100 MW possible.

I wonder what valuation SolFocus would receive in an acquisition after raising around $173.3 million to date?

2 comments

  1. jim says:

    Any idea how much Concentrix raised prior to this sale? Just trying to figure out whether this was a good/bad exit for Concentrix investors like Good Energies

    Thanks….

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