Monday, April 23, 2012

Enphase IPO Raises Half of Goal After Shares Price at Bottom

Enphase Energy Inc. (ENPH), the largest provider of microinverters for solar panels, raised $51.1 million in its initial public offering, about half of what it initially sought.

The company sold 8.97 million shares at $6 each according to a filing, the bottom of its expected range. Existing backers agreed to buy 2.5 million of the shares.

Enphase reduced the price range March 28 to $6 to $7, from an earlier range of $10 to $12. The company, based in Petaluma, California, said it was seeking to raise as much as $100 million when it initially filed to go public in June.

Proceeds will fund expansion into new countries in Europe and Asia and technology improvements, Paul Nahi, Enphase’s chief executive officer, said today by telephone. That may include improvements to the company’s networking system that lets customers monitor performance of their solar panels.

The shares began trading today on the Nasdaq Stock Market under the symbol ENPH and climbed 22 percent to $7.34 at the close in New York. That gives it a market value of $274 million, according to data compiled by Bloomberg.

Enphase makes microinverters that convert the direct current produced by solar panels into alternating current that is routed to the grid. Solar farms typically connect multiple panels to one, large inverter, while Enphase’s smaller products are designed to be wired to a single panel. The company says this increases efficiency.
Industry Transition

“We own this transition to microinverters, which is changing the solar industry,” Nahi said. “This is a $7 billion industry of which we did $150 million last year.”

The company’s revenue more than doubled to $149.5 million last year, while net losses widened 48 percent to $32.3 million, according to the filing. Enphase has sold more than 1.7 million microinverters since commercial shipments began in mid-2008.

The company has about a 30 percent share of the North American market for residential solar systems and 18 percent for commercial rooftop projects, Nahi said.

Enphase is the first of three renewable energy companies planning to go public in the U.S. in the next month. Enerkem Inc., a Canadian producer of ethanol and chemicals from trash, is expected to price its offering April 3, and the solar-thermal developer BrightSource Energy Inc. is set to follow on April 11, according to data compiled by Bloomberg.

Conventional inverter suppliers SMA Solar Technology AG (S92), Power-One Inc. (PWER) and SunPower Corp. are expected to introduce microinverter products this year, Enphase said in its filing. Other competitors include Siemens AG (SIE) and Advanced Energy Industries Inc. (AEIS)

Companies that have already invested in Enphase agreed to buy about 28 percent of the shares that were offered. The hedge fund Third Point LLC now holds 16 percent of the inverter maker. RockPort Capital Partners LLC owns 12.1 percent, Madrone Capital Partners LP owns 12.9 percent and Kleiner Perkins Caufield & Byers has an 11.7 percent stake.

The underwriters, which include Morgan Stanley (MS), Bank of America Corp. (BAC) and Deutsche Bank AG (DBK), have an option to purchase an additional 1.35 million shares to cover over-allotments.


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