GT Solar Tries to Light IPO Market
Print All Articles Letter to the editor Podcast
on 23 July 2008, 13:18
by Ken Schachter
GT Solar International, a New Hampshire-based maker of solar manufacturing equipment, will try to send a $610 million jolt into the initial public offering market on Thursday.
The maker of equipment for manufacturing silicon wafer and solar cells for solar power generation systems is backed by private equity and makes its debut on Nasdaq after a second quarter when not a single venture-backed company made the leap into the public markets.
Though it’s premature to gauge GT Solar’s impact on opening the IPO spigot, analysts said investors are showing keen interest.
“It’s oversubscribed,” said Scott Sweet, senior managing partner at IPO Boutique, an advisory firm, said of the $17.50 per share offering. “They’re the first IPO to come out in the solar space that provides capital equipment to the wafer and module solar companies.”
GT Solar competes against companies including semiconductor equipment maker Applied Materials and industrial giant Mitsubishi Electric as well as Amtech Systems and MEMC Electronic Materials.
Still, Mr. Sweet said the 14-year-old company has “manageable debt” and strong growth, tripling its revenue in fiscal 2008 versus the prior year.
“The company’s financials are in excellent shape—top line, bottom line, cash flow,” he said.
For the fiscal year ended March 31, GT Solar reversed a net loss of $18.4 million in 2007, posting a profit of $36.1 million on revenue of $244.1 million in fiscal 2008.
That ramp up in GT Solar’s revenue and profit, however, hinged on only a handful of customers. LDK Solar accounted for almost two-thirds of sales, Mr. Sweet noted, while only three companies are the source of 59 percent of GT Solar’s $1.3 billion order backlog.
Aside from GT Solar, several deals in the IPO pipeline are stirring investor interest, including DigitalGlobe, RackSpace, Solar Winds, and Yandex, a Russian search engine that Mr. Sweet likened to China’s Baidu and said could be the hottest IPO of the year.
Underwriters for the GT Solar deal are Credit Suisse Securities, UBS Securities, Banc of America Securities, Deutsche Bank Securities, Piper Jaffray & Co., and Thomas Weisel Partners.
GT Solar International will not receive any of the IPO proceeds, which will go primarily to its private-equity owners, GFI Energy Ventures and Oaktree Group, both based in Los Angeles.
"It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness;
-- Charles Dickens
