MEMC Electronic Materials,
Inc. (NYSE: WFR), a leading provider of silicon wafers to the semiconductor
and solar industries, has reached a definitive agreement to acquire privately
held SunEdison LLC, a developer of solar power projects and North America's
largest solar energy services provider. The acquisition is expected to close
by the end of 2009, subject to customary closing conditions and receipt of regulatory
The agreement calls for $200 million to be paid at closing to SunEdison security
holders, which will be paid 70% in cash and 30% in MEMC stock. The agreement
also includes an earn-out provision, should SunEdison meet certain performance
targets in 2010, of up to an additional $89 million, consisting of cash and
stock. In addition, the agreement calls for employee retention payments of $17
million in cash at closing, plus up to $34 million in stock which is subject
to SunEdison meeting certain performance criteria and time vesting, the payment
of certain transaction expenses and the assumption of net debt.
"This acquisition will provide a third engine of growth for MEMC,"
said Ahmad Chatila, Chief Executive Officer of MEMC. "MEMC will now participate
in the actual development of solar power plants and commercialization of clean
energy, in addition to supplying the solar and semiconductor industries with
our traditional silicon wafer products."
"SunEdison has successfully built about 300 solar power plants representing
approximately 80 MW of generating capacity on the rooftops and grounds of customers
in the United States, Canada and Europe," said Carlos Domenech, Chief Operating
Officer of SunEdison. "Our business is highly scalable and will be able
to grow substantially, capitalizing on our more than 1.5 GW of pipeline, backlog
and leads with a financially strong, technically sophisticated partner like
MEMC, which also has a competitive cost structure in upstream materials. This
combination will greatly accelerate our goal of making solar energy cost competitive
with grid prices."
SunEdison is based in Beltsville, Maryland and employs approximately 300 people
worldwide. It "simplifies solar" by managing the development, financing,
operation and monitoring of solar power plants for commercial customers, including
many national retail outlets, government agencies, and utilities. In a typical
structure SunEdison arranges third-party, non-recourse financing for the facility
and the customer has no up-front capital outlay.
With one of the strongest brands in solar, SunEdison will continue to operate
with the SunEdison name, as a subsidiary of MEMC. Carlos Domenech will continue
to lead SunEdison. After the acquisition is complete, he is expected to be named
as Executive Vice President of MEMC and President of SunEdison, reporting to
"By making solar power more affordable and easy to obtain, we expect to
tap into a large pent-up demand," added Mr. Chatila. "We believe this
strategy will drive revenue growth for our wafer business while producing a
recurring revenue stream from solar-generated electricity. This will also allow
us to directly benefit from the technological and cost advances that we are
helping to create in the solar industry."
Mr. Chatila concluded, "In short, we believe MEMC and SunEdison make a
powerful combination, and we are excited about having their talented employees
around the world join the MEMC team."
MEMC expects the acquisition to be accretive to earnings, subject to purchase
accounting adjustments, by the second half of 2010.