TPG’s Rise Fund buys a $500m stake in Nextracker, Flex’ solar unit, which had been planning on an IPO

Feb 4, 2022 | News

David bonderman

TPG Rise Climate, which is a fund within private equity firm TPG Inc. has bought a stake in Nextracker, the solar industry subsidiary of Flex. Its investment, which amounts to $500m, came at an implied enterprise value of $3bn.

Flex sold the $500m stake for $170m more than the firm paid for the entire Fremont-based company in 2015.

Nextracker sells hardware and software that helps large-scale solar energy installations track the sun to improve efficiency and output. About half its 550 employees are based in Fremont. The rest are spread around the globe.

Following the transaction, Nextracker will continue to be owned by Flex, whose management team and U.S. operations are based in San Jose. But it will be run as a separate business in partnership with TPG Rise Climate. Beginning with Flex’s next quarterly report, Flex will disclose Nextracker’s results separately.

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The deal comes about 10 months after Nextracker said it had made a confidential filing for an initial public offering. Flex, which purchased the then-two-year-old startup for $330m, is still considering having it go public, CEO Revathi Advaithi said in a press release.

“We continue to look at the market and will evaluate the right time to do a transaction, but we remain committed to creating value for shareholders,” Advaithi said.

As part of the deal, TPG Vice Chairman Jonathan Coslet and TPG Rise Partner Steven Mandel will join Nextracker’s board.

“As global solar installations continue to grow across the US and globally, Nextracker is well-positioned to be the long-term tracking provider of choice for solar developers and engineering, procurement and construction companies,” Mandel said in Wednesday’s announcement.

Source: Business Journal

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