Financially troubled microinverter company Enphase Energy has announced that it is to allow Flextronics to market, manufacture and sell certain products from its portfolio in a move that is expected to ease Enphase’s operating expenses and severe cash flow issues.
Information of the deal was outlined in a Form 8-K filing published on the Securities and Exchange Commission (SEC) dated June 13. The ‘Material Definitive Agreement’ sees Enphase Energy license its intellectual property to Flextronics, a Singapore-headquartered contract manufacturer of electronic goods that works closely with a number of leading solar power companies.
The deal with Flextronics – a longstanding manufacturing partner of the California-headquartered company – could provide a short-term fillip for Enphase, which has in the past 24 months been mired in financial difficulty as the competitive nature of the module level power electronics (MLPE) industry has bitten down on the firm’s bottom line.
The company managed to raise around $50 million debt and equity capital in the first quarter (Q1) of the year, while also unveiling a suite of new products, including the IQ6 microinverter. Its AC home battery is now available in more solar markets in a move that could open up profitable and sustainable revenue streams for the firm.
Flextronics’ involvement may assure the continuity of supply to Enphase customers, particularly in relation to older and non-core product lines, while also helping to ease Enphase’s working capital requirements in the sales and marketing departments.