Array Technologies, a solar tracker company based in New Mexico, filed paperwork on Tuesday indicating plans to take the company public with an initial offering of $100 million.
The move would make Array, which would trade under the ticker ARRY, the second-largest publicly owned tracker company in the world in terms of shipments. Array did not respond to request for comment on when it expects to launch the IPO.
Trackers allow solar panels to follow the sun and absorb more light, and they are becoming increasingly common equipment on large-scale solar installations worldwide. In the next five years, Wood Mackenzie anticipates the market will grow by 45 percent.
Their use is becoming especially common in the U.S., which accounted for half of global shipments last year, in part due to the safe-harboring provision of the federal Investment Tax Credit. That allows developers and engineering, procurement and construction providers to buy up equipment to use in later installations, thus ensuring projects can capture the tax credit with less dependence on construction dates.
In the tracker space, Array ranks second behind California-based NEXTracker, which claimed nearly 30 percent of the global market in 2019. Array’s market share, by comparison, is a little over half that. But the two are much more closely matched in the United States, according to Wood Mackenzie. Flex, the parent company of NEXTracker, is also a public company.
About 70 percent of ground-mounted solar installations built in the U.S. last year included trackers, according to data from Bloomberg New Energy Finance that Array cited in its IPO filing with the U.S. Securities and Exchange Commission. In 2019, sales in the U.S. made up about 87 percent of Array’s revenue.
In recent years, Array has grown its business and its market share, both globally and in the U.S. Through August of this year, Array reported $689 million in expected contracts for shipments planned in 2020 and 2021. That’s a 65 percent increase over contracts agreed through August 2019, the company said in its SEC filing. Last year Array recorded $648 million in revenue and nearly $151 million in gross profit, with $140 million in gross profit in the six months ending on June 30.
The IPO will provide the company with capital to pay back a loan, with the remaining proceeds going to general corporate activities and operating expenses.
Competition between NEXTracker and Array has been the source of some controversy in the past. A lawsuit Array filed last year alleged NEXTracker, its CEO Dan Shugar and parent company Flex had employed “threats, intimidation and coercion” to undercut Array. It’s not the first time Array has sued NEXTracker, and legal proceedings between the two companies are ongoing.
Array and NEXTracker employ different technologies. While NEXTracker uses individual motors to control each row, Array links rows together and runs them on just one motor. Using “less than one motor per megawatt,” Array states in its IPO filing, “lowers the cost, reduces the number of failure points and minimizes the maintenance requirements” of an Array system.
Goldman Sachs, JP Morgan, Morgan Stanley, Credit Suisse, Barclays and UBS Investment Bank will underwrite the offering.