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 approvals.
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."