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Shares of Enphase Energy rocket after it buys SunPower’s microinverter business

The California-based firm expects to add US$60mln to US$70mln in annualized revenue in the second half of 2019.
A man working on solar panels
The deal gives Enphase Energy a treasure trove of 140 patents to boost its IP portfolio

Shares of Enphase Energy Inc. (Nasdaq:ENPH) soared in pre-market trade Wednesday after the California-based maker of solar microinverters and power-storage systems, announced a cash-and-stock deal to acquire the microinverter business of SunPower Corp. (Nasdaq:SPWR).

Shares of Enphase Energy rocketed 40% to US$6.30, while SunPower was up nearly 2% to US$8 in the pre-market.

The Petaluma, California-based company said late Tuesday that it plans to acquire SunPower's microinverter business for US$25mln in cash and US$7.5mln in shares of Enphase common stock.

The transaction adds over 140 patents to Enphase's strong intellectual property portfolio. It also gives a fillip to SunPower's Equinox Home Solar System with a custom line of Enphase IQ microinverters for use with SunPower AC modules.

The five-year agreement is likely to accelerate global adoption of AC modules as the de facto residential solution.

“We are pleased to become the microinverter supplier for SunPower’s AC Modules,” said Enphase Energy CEO Badri Kothandaraman.

“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,” he added.

Bump in revenue

Enphase said in a statement that it expects to add US$60mln to US$70mln in annualized revenue in the second half of 2019 at 33% to 35% gross margin with the acquisition.

Tom Werner, CEO of Silicon Valley-based SunPower, said co-development on Equinox microinverters will lead to “containing costs, leveraging R&D support and helping streamline our business priorities.” 

The transaction is expected to close by end of the third quarter, with initial IQ microinverter shipments in the fourth quarter. 

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