Thursday, July 24, 2008

GT Solar prices IPO to raise up to $500M

By Mass High Tech Staff

GT Solar International Inc., the holding company of Merrimack, NH-based GT Solar Inc., priced its highly anticipated initial public offering this morning, opening on the Nasdaq exchange at an opening price of $16.50 per share.

The offering is expected to raise the company, which makes photovoltaic manufacturing equipment, close to $500 million and give it a market capitalization of approximately $2.2 billion.

The offering comes more than a year after the company filed its original S-1 statement with the Securities and Exchange Commission in April of 2007, and marks the region’s first IPO since Andover-based Memsic Inc. (Nasdaq: MEMS) hit the market in December of 2007. Last year, nine local VC-backed companies had completed IPOs by midyear and 20 went public in all of 2007.

GT Solar (NASDAQ: SOLR) employs 150 people in Merrimack, and officials have reported they intend to add 80 employees as they add 60,000 square feet to their facility. The company reported $36.1 million in net income on $244.1 million in revenue last year (ending March 31) and has closed several big deals in recent months, including a $200 million sale to DC Chemical Co. Ltd. of South Korea in March, and a $91 million contract with The Silicon Mine BV of the Netherlands.

However, the public market for solar stocks has been volatile of late. Chinese firms JA Solar Holdings Co. Ltd. and Solarfun Power Holdings Co. Ltd., which went public in February of 2007 and July of 2006, respectively, have fallen to within dollars of the original offering prices. Colarado-based Real Good Solar went public in May at a price of $10 per share and has slipped to $6.38 at yesterday’s close. Even local solar panel manufacturer Evergreen Solar Inc. in Devens, which has announced a string of new deals over the past two months, has slipped from a 52-week high of $18.84 per share in December to $9.00 at yesterday’s close.

Founded with $1,000 in stake money as GT Equipment by Kedar Gupta and Jonathan Talbott in 1994, GT Solar has been funded by sales from the start. The company’s first customer, Tatung Co. of Korea, agreed to pay $5 million of its contract up front, and the company has never looked back. It received one round of $5 million in 2001 to build its manufacturing plant, though that money was paid back by 2006. 

Talbott left the operations side of the business several years ago, and Gupta retired from the company last year, handing the reigns to CEO Tom Zarrella.