The vertically-integrated photovoltaic solar developer Solar Power Inc just announced that one of its subsidiary’s — Xinwei Solar Power Engineering — is entering into a framework purchase agreement with the intent to acquire Shanghai All-Zip Roofing System Group.
The framework purchasing agreement is between Solar Power Inc (SPI Solar) and all of All-Zip Roofing’s owners, plus five private equity investors.
Given that All-Zip Roofing is the dominant “roofing solutions” provider in the Chinese market, it’s not exactly a mystery why SPI Solar is interested in acquiring them — the company is “vertically integrated” after all.
(Interestingly, All-Zip Roofing actually played “a key role in the development and drafting of national roofing standards in China, and established the first industry association for roofing in the country.”)
“We are pleased to announce this framework agreement with All-Zip Roofing,” noted SPI Solar’s Chairman Xiaofeng Peng. “We aim to leverage our high-quality, low-cost development services and All-Zip Roofing’s leading position in the roofing business to become the leading DG business in China. All-Zip Roofing’s dominance in Eastern China, one of the fastest growing markets for DG, will increase our access to an especially promising market.”
As per the conditions of the agreement, SPI Solar is looking to acquire All-Zip Roofing for “an aggregate purchase price of 11 times the earnings of All-Zip Roofing, based on its audited financial statements for 2014, or approximately RMB330.0 million. Consideration for the acquisition will consist entirely of SPI ordinary shares valued at a price of US $2.38 per share, and will be calculated based on the exchange rate at October 28, 2014.”
Before the acquisition moves forward All-Zip Roofing will, reportedly, conduct an off-shore/on-shore corporate reorganization. The closing date for the deal is set to be 10 working days after all previously mentioned conditions are met.
Image Credit: SPI Solar
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