GCL-Poly agrees to buy $150 million of SunEdison's manufacturing business

Rumors started circulating late last week that GCL-Poly Energy Holdings’ parent company Golden Concord Holdings Ltd. was planning to acquire some of SunEdison’s business, and confirmation has arrived in a filing to the Hong Kong stock exchange. Now GCL-Poly Energy Holdings – already the world’s largest manufacturer of solar-grade polysilicon – will add SunEdison’s polysilicon business to its portfolio, expanding the company’s production capacity even further.

Within the filling, SunEdison and three of its manufacturing businesses are listed as sellers, including subsidiaries SE Products Singapore Pte., MEMC Pasadena Inc. and Solaicx Inc., while 65.25% of the outstanding shares of SMP Ltd, will also be purchases as part of the transaction. The businesses are involved in the manufacturing of polysilicon, ingots, and solar cells.

The price that the two parties have agreed on is $150 million, however, $50 million of that will be funded into escrow accounts and distributed back to GCL “if certain post-closing conditions are not satisfied,” according to the filling. The closing of the deal is due to be completed by 30 November 2016 – although this can be extended until 31 March 2017 – otherwise either of the parties is able to cancel the deal.

GCL-Poly in a healthy spot

GCL-Poly announced that the deal would have a number of benefits for its business, including expanding its polysilicon production capacity, enhancing its research and development on electronic grade granular polysilicon on FBR technology, enhancing its technology, and reducing its production costs. The company already enjoys dominate shares of the global polysilicon and solar wafers markets, 30% and 40% respectively, and posted impressive H1 financial results earlier in the month, with its revenue growing 28% and gross profit increasing an incredible 66%.

The Chinese company looks to be taking advantage of SunEdison’s precarious position after it filed for Chapter 11 bankruptcy in April, forcing it to sell a number of its assets, including over 5 GW of wind and solar plants worldwide.

Last week, reports from Bloomberg suggested that GCL’s parent Golden Concord Holdings is poised to make a bid for SunEdison’s controlling stake in TerraForm Power, which has an estimated market valuation of $1.6 billion. However, Canadian firm Brookfield Asset Management has also showed an interest in acquiring SunEdison’s stake in the business, which could see the two companies competing in the near future.