Encapsulant maker STR Holdings has announced plans to sell a 51% stake in the Connecticut-based company to Chinese PV power station developer Zhenfa Energy Group for some $21.7 million.
The deal, which remains subject to approval by STR stockholders and fulfillment of other conditions, is part of a wide-ranging strategic collaboration between the companies that would give STR a major beachhead in Chinas booming PV market: The agreement also calls for Chongqing-based Zhenfa to help drive sales of STR encapsulant to solar module manufacturers in China.
"We expect to benefit greatly from Zhenfa's longstanding presence, key position as a major purchaser of solar panels and well-respected reputation in the region," said STR Global Director of Sales and Technology Luke A. Strzegowski.
The vertically integrated Zhenfa group includes a solar engineering, procurement and construction (EPC) company that designs, installs, owns and operates utility-scale photovoltaic power plants primarily in China and is a large customer of many of the top-tier Chinese module manufacturers. As one of China's top EPC companies, Zhenfa contracted installations of approximately 1.3 GW of solar systems during 2013, according to STR. Currently, Zhenfa owns stakes in more than 40 solar power installations, either completed or under development, in more than 10 provinces in China and has also constructed several projects in western markets.
STR President and CEO Robert S. Yorgensen said the company expected the new alliance with Zhenfa to significantly strengthen our existing relationships with many of the top-tier Chinese module manufacturers, and to help create important new relationships for STR within the world's largest solar module manufacturing market."
Zhenfa Chairman Zha Zhengfa added, As a purchaser and end-user of a great number of solar panels, Zhenfa believes that our investments in solar power stations will benefit from the inclusion of STR encapsulants. Our investment in STR recognizes its pioneering work in the encapsulant field over the last 40 years, as well as its steadfast innovations to maintain quality leadership in the current market.
Zhengfa said Zhenfa aimed to develop more than 10 GW of solar power stations in the next three years.
If approved, STR would pay its shareholders (excluding Zhenfa) a special dividend of approximately $22.6 million.