Sharp Electronics Corp., a long-time photovoltaic producer (the company produced the first solar-powered calculators) proposed a roughly $305 million purchase of Recurrent Energy, a solar power developer.
The mutually beneficial deal allows Sharp to get into the solar-power generation market and allows Recurrent, a California-based solar company, access to greater financing to support the development of more than 2 gigawatts of solar projects in the United States and abroad. The deal is expected to close later this year, but remains subject to regulatory approval.
Recurrent was seeking a partner to help it expand its operations, explained Sean Gibson, a spokesperson for Recurrent. He said the company hired Morgan Stanley to help it determine which company would be a suitable partner and determined that, among the companies that showed interest, Sharp was the best suitor.
Recurrent is a developer of solar generating facilities. It finances, builds, owns and operates its facilities, and sells them through power-purchase agreements and feed-in tariff programs, according to Gibson. The company now has 2 gigawatts of projects planned, including, for instance, a 170 megawatt solar plant in Ontario that will be completed in 2013.
“When you start having business at that scale, you need the financial resources of someone like Sharp,” he said.
Under the proposed deal, Recurrent would become a wholly owned subsidiary of Sharp, but would remain independent, Gibson said. He added that under the deal, Sharp wouldn’t require Recurrent to use its PV products, nor does the deal allow for preferential pricing of Sharp’s PV modules to Recurrent. Right now Recurrent uses a variety of panels.
“It is still our policy to use the most appropriate and best-priced technology for each development,” he said.
What the deal allows, Gibson explained, is the “backing of a global brand to cement [Recurrent’s] position and pursue its goal of building a leading global solar company.” The expanded access to the global solar-generating market will be beneficial for both companies.
While most of Recurrent’s current projects are now in North America, the company also has a project operating in Spain and projects it’s working on in France and Israel.