In September 2015, SJF portfolio company NEXTracker was acquired by Flex International Inc. for a total of $330 million, proving to be a great impact investment success story with tremendous environmental impact via its products, rapid company growth, and a successful exit to a multi-national company that will allow NEXTracker to achieve even greater scale in the future.
NEXTracker is the designer and manufacturer of technology that enables solar panels to track the sun for utility-scale and distributed generation solar projects around the world. Single axis trackers, as versus fixed tilt mounting systems, are becoming the standard in the rapidly growing global, ground-mounted solar market. There are relatively few large-scale vendors of tracking systems as versus the more competitive segments of the solar supply chain, such as panels, inverters, and racking.
NEXTracker’s single-axis solar PV tracker offers a significant breakthrough in horizontal tracking, with lower costs, better performance and more flexibility for ground-mounted solar power plants. These benefits increase solar project profits for developers, engineering & construction players (EPCs), and system owners. Leveraging world-class design and installation expertise, the company has delivered trackers for projects across five continents.
SJF Ventures had led the company’s Series B financing in December 2014, just nine months prior to its acquisition, with participation from existing investors, Sigma Partners and DBL Investors, and new investor, Tennenbaum Capital Partners. SJF had been engaged with NEXTracker for about a year prior to the 2014 financing and became convinced it would become a market leader due to its unique balanced tracking technology and veteran solar team. SJF was also impressed with the team’s commitment to sustainability, as stated on the company website:
We Think Big: The NEXTracker team has worked for decades to advance an environmentally responsible approach to power generation. By harnessing the power of the sun, we’re helping to secure clean, reliable, emissions-free electricity. Our tracking systems can be found in some of the most advanced PV power plants on the planet, providing safe, reliable solar power for generations. We think big and act to impact for a more sustainable world.
We also believe that sustainability sprouts in small moments and myriad detailed ways. We’re implementing sustainable principles and practices in every component of our business: from design, to manufacturing, to the field.
The solar projects installed using NEXTracker’s systems shipped in 2015 around the world will generate enough power for approximately 120,000 homes and to offset carbon dioxide emissions of 1,100,000 tons per year.
While SJF typically invests for 3-6 year periods, the hyper growth of NEXTracker coupled with its strategic value to Flex resulted in a compelling exit opportunity just nine months after SJF’s investment. Today NEXTracker reduces the Levelized Cost of Electricity (LCOE) at the system level by more than 9 percent. The company should be able leverage Flex’s global supply chain to continue to drive down the cost of solar power and make it ever more competitive with fossil fuel-based forms of energy production.
“Joining Flex will enable NEXTracker to accelerate its growth while leveraging our best-in-class, innovative technologies, and a shared passion for advancing the future of renewable energy,” said NEXTracker’s CEO Dan Shugar. “Flex has a solid global infrastructure, an experienced team, and world-class capabilities that will allow us to scale our solar solutions and help take our business to the next level.”
In November 2015, NEXTracker announced it was shipping 100 MW of its solar trackers per week to locations around the world and had over 1800 MW of advanced trackers operating or under construction.