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ALBUQUERQUE - Array Technologies, Inc. (NASDAQ:ARRY), currently trading at $7.39 with a market capitalization of $1.13 billion, announced Tuesday its intention to offer $250 million in convertible senior notes due 2031 through a private placement to qualified institutional buyers. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
The solar tracking technology provider said it plans to grant initial purchasers an option to buy up to an additional $37.5 million in notes within a 13-day period after issuance. The notes will be senior, unsecured obligations with semiannual interest payments. InvestingPro data shows the company maintains a healthy current ratio of 2.39, with liquid assets exceeding short-term obligations.
Array intends to use the proceeds to repay $150 million of its outstanding term loan facility, fund capped call transactions, and for general corporate purposes, which may include repurchasing some of its existing 1.00% Convertible Senior Notes due 2028.
The company plans to enter into privately negotiated capped call transactions with initial purchasers or their affiliates to reduce potential dilution to common stock upon conversion of the notes. These transactions will cover the number of shares initially underlying the offered notes, subject to anti-dilution adjustments.
Conversion settlements will involve cash payment up to the aggregate principal amount, with the remainder paid in cash, shares of Array’s common stock, or a combination, at the company’s discretion.
The interest rate, initial conversion rate and other terms will be determined at pricing. The notes and potential shares issuable upon conversion will not be registered under the Securities Act of 1933 and may only be offered to qualified institutional buyers under Rule 144A.
Array Technologies describes itself as a leading global provider of solar tracking technology for utility-scale and distributed generation customers, with manufacturing based in the United States.
The announcement was made in a press release statement from the company.
In other recent news, Array Technologies has announced its acquisition of APA Solar for approximately $179 million, which is expected to expand Array’s addressable market by nearly 40%. The transaction is anticipated to be accretive to adjusted earnings per share in the first year, excluding potential synergies. APA Solar generated about $129 million in revenue and $25 million in EBITDA in 2024, excluding 45X credits. Mizuho has raised its price target for Array Technologies to $9.00, while maintaining a Neutral rating, citing the strategic nature of the acquisition. Oppenheimer reiterated an Outperform rating with a $13.00 price target, noting the potential for supply chain and sales synergies. The acquisition will add domestically manufactured engineered foundations and fixed-tilt mounting systems to Array’s offerings. APA’s senior management will remain with the company to lead the new Foundation Solutions Business post-acquisition. Additionally, at Array’s recent Annual Meeting of Stockholders, key decisions were made, including the election of board members and the ratification of Deloitte & Touche LLP as the independent accounting firm.
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