The acquisition of US-based solar equipment maker Boviet Solar is being planned by Inox Clean Energy at an enterprise value estimated to be about $750 million, informed sources said. The proposed deal is likely to aid the entry of Noida-based Inox into the American solar equipment market.
San Jose-headquartered Boviet Solar is one of the leading solar equipment manufacturers in the US. Enterprise value includes the total enterprise value of the deal along with debt and cash consideration.
Strategic entry into the US solar market:
The proposed acquisition will serve the purpose of entering the international market for Inox Clean Energy, which has been working on expanding itself across solar power markets in the residential, commercial, and industrial sectors.
Sources in the industry suggest that there is room for growth in the US market in light of changing policy environments, making the situation favorable for businesses not originating from China. Inox intends to take advantage of the current climate by gaining a foothold within the market through manufacturing and supply operations.
Changes in policy environment affect competitiveness:
Boviet Solar is an affiliate of Ningbo Boway Alloy Material, which is a Chinese conglomerate that has been conducting strategic reviews on its US operations because of changing circumstances such as trade issues and eligibility for subsidies.
Within the past few months, various Chinese solar manufacturing companies have had to reconsider the status of their investment in the US in the wake of changing regulations and trade policies. This has opened up opportunities for foreign firms.
This particular transaction is indicative of a larger trend in the industry, where firms are altering their supply chains and ownership structures to adapt to local policy climates.
