North Coast Solar Stocks

October 22, 2009

MEMC To Acquire SunEdison; Posts Q3 Loss; Stock Falls

Filed under: AMAT, STP, WFR — Tags: , , , , , , , — Jason @ 8:14 pm

By Eric Savitz
barrons.com

In a major diversification move, polysilicon producer MEMC Electronic Materials (WFR) this afternoon said it will acquire SunEdison for at least $200 million in cash and stock.

SunEdison, which developers, finances, owns and operates solar projects, has about 300 employees. Investors in the company include Goldman Sachs, MissionPoint Capital Partners, Black River Asset Management, Greylock Partners, HSH Nordbank and Applied Materials (AMAT).

Terms call for MEMC to pay the $200 million purchase price 70% in cash and 30% in stock; the deal also includes a provision for an earn out of up to $89 million, based on certain performance targets. The company is also paying $17 million in retention payments to certain SunEdison employees, plus up to another $34 million in stock, subject to performance criteria and vesting. MEMC will also assume SunEdison’s net debt.

MEMC said the deal should be accretive to earnings by the second half of 2010.

Meanwhile, MEMC posted Q3 revenue of $310 million, ahead of the Street consensus of $301.6 million. The company suffered a loss in the quarter of $64.6 million, or 29 cents a share, due in part to a $39.7 million restructuring and impairment charge, a $19.2 million tax-related item and $6.3 million hit for a reduction inthe value of the company’s Suntech (STP) warrants.

For Q4, the company sees revenue of $310 million to $350 million; the midpont of the range at $330 million is below the previous Street consensus at $341.6 million.

In late trading, WFR fell 58 cents, or 3.8%, to $14.85.

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