STR Holdings Inc. is selling controlling interest to Chinese solar power developer Zhenfa Energy Group to create a new strategic partnership.
STR Holdings Inc. proposed a partnership expected to yield significant short and long-term benefits for the company and its shaholders. The deal calls for selling a 51 percent controlling interest stake in the company to Chinese PV power station developer Zhenfa Energy Group for 21.7 million USD. The transaction would value STR at 42.5 million USD, or 1.60 USD per share, and would allow STR to fund a special cash dividend to stockholder for 0.85 USD per share. This partnership is also expected to accelerate sales of STR’s solar products in China.
The company will still have about $25 million in cash and zero debt after paying the dividend. The dividend will be funded substantially with the money that it will receive from Zhenfa. It is expected to be paid to STR shareholders shortly after closing of the transaction, which is expected to occur in the 4th quarter.
The deal is part of a wide-ranging strategic collaboration between the companies that would give STR Holdings a major presence in China’s booming PV market. The agreement also calls for Zhenfa to help drive sales of STR encapsulant to solar module manufacturers in China.
Joseph C. Radziewicz, STR’s Vice President and Chief Financial Officer, said, “We look forward to presenting this unique strategic transaction to our stockholders for approval.”
STR, together with its subsidiaries, designs, develops, manufactures, and sells encapsulants for solar module manufacturers worldwide. Its encapsulants protect the embedded semiconductor circuits of solar panels. The company’s products are used in crystalline silicon and thin-film solar modules. The company estimates that over 20% of solar panels installed worldwide are STR Protected. STR Holdings, Inc. was founded in 1944 and is headquartered in East Windsor, Connecticut.