It looks like the big boys – and girls – want to follow the sun. Nextracker Inc. (NXT proposed) launched its $500 million IPO late Wednesday (Feb. 1, 2023) after the market’s close. The solar tracker company’s IPO has a joint book-runner’s team chock full of big names. J.P. Morgan, BofA Securities, Citigroup and Barclays are the first four names on the prospectus. The book-runners’ list includes these familiar names from Wall Street’s fraternity: Truist Securities, HSBC, BNP Paribas, Mizuho, Scotiabank and KeyBanc Capital Markets. SMBC Nikko, BTIG, UniCredit, Roth Capital Partners and Craig-Hallum are the co-managers.
Nextracker plans to offer about 23.26 million shares at $20 to $23 to raise $500 million. The Nextracker IPO is scheduled to price next week – on Thursday night (Feb. 9, 2023) to trade Friday, Feb. 10. This is a NASDAQ listing.
The size of Nextracker’s IPO – $500 million – matches the size of a minority stake that its parent, Flex Ltd., sold a year ago to TPG Rise Climate, the climate-focused investment arm of the global private equity powerhouse, TPG. (For more details on the Nextracker-Flex-TPG dance, read the prospectus – and have a glass of your favorite beverage handy. It’s not light beach reading.)
BlackRock, Bright Sun
BlackRock, Inc. and Norges Bank Investment Management have indicated an interest in buying up to an aggregate of $100 million – or 20 percent – of Nextracker’s IPO.
Based in Fremont, California, Nextracker describes itself as a leading provider of intelligent integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world.
The trackers make it possible for solar panels to turn and follow the sun.
“Our products enable solar panels in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance,” Nextracker says in its prospectus. “We have led the solar industry based on gigawatts (“GW”) shipped globally in 2015 and both globally and in the United States from 2016 to 2021.”
All those gigawatts add up to green stuff in the bank: Net income of $50.9 million on revenue of about $1.46 billion for the last 12 months, according to financial statements in the prospectus.
Flex Time
Nextracker’s parent company, Flex Ltd., will control Nextracker after the IPO, the prospectus says.
“Immediately after this offering,” the prospectus says, “Flex Ltd., our parent company, will own, indirectly through one or more subsidiaries, 90.76% of the outstanding shares of our Class B common stock, representing 65.96% of our total outstanding shares of common stock (or 63.56% of our total outstanding shares of common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and, so long as it owns a controlling interest in our common stock, it will be able to control any action requiring the general approval of our stockholders, including the election and removal of directors, any amendments to our certificate of incorporation and the approval of any merger or sale of all or substantially all of our assets. Accordingly, we will be a “controlled company” within the meaning of the corporate governance rules of Nasdaq. See “Risk factors—Risks related to the Transactions and our relationship with Flex,” “Management—controlled company exemption” and “Principal stockholders.””
Nextracker breaks it down a little more with this paragraph, packed with lingo that only a lawyer could love:
“We will be a holding company and, upon the completion of this offering, our principal asset will consist of LLC Common Units that we acquire from a subsidiary of Flex Ltd. with the proceeds from this offering and common units issued to us in connection with the merger of certain blocker corporations, representing 26.75% of the total economic interest in the LLC (as defined herein) (or 29.17% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). The remaining economic interest in the LLC will be owned by subsidiaries of Flex Ltd. and TPG Rise Flash, L.P. through their ownership of LLC Common Units.”
News of Nextracker’s IPO launch broke after the U.S. stock market’s close today (Wednesday, Feb. 1, 2023). The Street is likely to have plenty to say about this one after the sun comes up tomorrow.
Stay tuned.
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