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July 22, 2009
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Earlier today, Michigan-based Energy Conversion Devices, Inc. (ENER) announced the signing of a definitive acquisition agreement with Solar Integrated Technologies, Inc. Energy Conversion Devices has already received the approval of Solar Integrated’s board, with only the shareholders’ consent pending.
Michigan-based Energy Conversion Devices is one of the premier players in the integrated and commercial rooftop photovoltaics segment. The company manufactures and sells thin-film solar laminates under the UNI-SOLAR brand.
Solar Integrated Technologies designs, manufactures and installs building integrated photovoltaic (BIPV) roofing systems for commercial rooftops.
The acquisition is a good move for Energy Conversion Devices, as it will automatically lay its hands on Solar Integrated Technologies wide customer base. Also, Solar Integrated’s well-proven field engineering and technical capabilities in rooftop solar will enhance its capabilities.
As per the agreement, Energy Conversion Devices will dish out approximately $0.11 per share of Solar Integrated totaling around $11.2 million. However, Energy Conversion Devices will also have to swallow Solar Integrated's net debt obligations. This will take the sticker price to approximately $16.3 million. Energy Conversion Devices plans to finance the deal out of its own pockets.
Energy Conversion Devices will report the three month period result ending on June 30, 2009, on August 27. The street estimates the company to swallow a loss of 0.04 per share while we expect the company to barely break-even. Energy Conversion Devices trades at an estimated forward price earnings ratio of almost 27 times, while peers such as CSIQ trades just over 28 times. We maintain our long-term BUY rating on ENER.
Read the full analyst report on "ENER"
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