Update: SunPower to acquire Tenesol, and analyst’s take

SunPower (NASDAQ:SPWR), high-efficiency solar cell, panel, and system manufacturer, signed a definitive agreement to acquire Tenesol, a global solar provider with solar panel manufacturing facilities in France and South Africa.

December 27, 2011 – PRNewswire — SunPower Corp. (NASDAQ:SPWR), high-efficiency solar cells, solar panels and solar systems manufacturer, signed a definitive agreement to acquire Tenesol SA, a global solar provider headquartered in La Tour de Salvagny, France, with solar panel manufacturing facilities in France and South Africa.

Tenesol is currently a wholly owned subsidiary of Total SA, and has operations in 18 countries. SunPower will acquire Tenesol from Total for $165.4 million in cash. Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50% premium to SunPower’s December 22, 2011 closing price. The transaction has been approved by an independent committee of SunPower’s board of directors and is expected to close early in 2012 following the satisfaction of customary closing conditions. SunPower expects the acquisition will positively affect its financial position in 2012. After the sale of Tenesol, Total will own approximately 66% of SunPower’s common shares.Deutsche Bank Securities Inc. provided a fairness opinion to the independent committee of SunPower’s board of directors in connection with the acquisition.

Total and SunPower also reached new agreements that further strengthen SunPower’s balance sheet and liquidity position. In addition, Total has agreed to pursue negotiations for several additional agreements with SunPower related to directly investing in SunPower’s research and development, developing the first initial, full-scale, commercial concentrator power plant with the SunPower C7 Tracker, and purchasing 10MW of SunPower products for the development of projects worldwide.

Also read: SunPower: Will cutbacks, cost/W roadmap be enough?

Tenesol has been designing, engineering, manufacturing, installing and managing solar energy systems for its global customer base since 1983. It is a top-tier solar energy operator in Europe and a leader in the French market for large industrial and commercial photovoltaic rooftop solutions. The company has installed more than 15,000 solar systems worldwide totaling 500 megawatts (MW) dc. With a significant footprint in Europe, and as being a leader in the off-grid emerging market sector, Tenesol recorded revenue of EUR240 million in 2010 and expects to record revenue of approximately EUR200 million in 2011. Post acquisition, the combined company will have deployed more than 2500MW dc globally.

SunPower’s Tom Werner, president and CEO, says the acquisition will help differentiate SunPower in the solar market, expanding it downstream. Werner credits SunPower’s 6-month-old partnership with Total for improving its market access, research and development work, and balance sheet. “Tenesol’s well-established channels, manufacturing base and complementary global footprint will help expand SunPower’s market reach and accelerate its share gain during market consolidation,” add Philippe Boisseau, president, Total Gas and Power Division.

Analyst’s Take

Citi’s Tim Arcuri called this a “win-win for Total,” which is providing the funding for this deal — and which has paid a 50% premium for SPWRA stock that’s been on a “precipitous decline” since the company’s initial controlling interest closed in mid-June. That, he posits, is the real reason behind Total’s desire to consolidate the rest of SWPRA shares “as quickly as possible.”

What SPWRA gets (more of) with this added ownership, according to Arcuri:

– Tenesol’s EPC strength for its project pipeline
– Panel manufacturing for SPRWA’s high-efficiency cells
– Additional access to both existing markets (e.g. Europe where commercial-market penetration has been tricky for SPWRA) and emerging markets (e.g. South Africa)
– Tenesol (and its ~?200M in 2011 revenues), integrated into SPWRA’s R&C segment, likely boosts volumes and maybe ASPs

Not only will Total eventually buy up the rest of SPWRA shares “as quickly as possible,” Arcuri says — in fact he believes “this is the only thing that continues to support the stock as the core module business has very little value.” Look for any more clarity to come out of SPWRA’s Feb. 2012 guidance results.


SunPower Corp. (NASDAQ:SPWR) designs, manufactures and delivers high-efficiency, high-reliability solar panels and systems. For more information, visit www.SunPowercorp.com.

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