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GT Solar International Inc. has reached an agreement to pay $203 million to re-purchase company stock from its private equity investors, in order to retire the shares, the company announced Monday.
The Merrimack, N.H.-based solar equipment maker also said the company’s chairman — J. Bradford Forth of Oaktree Capital Management, one of the company’s investors — would resign at the close of the transaction. He would be succeeded by Matt Massengill, former chairman and CEO of Western Digital Corporation and a director of GT Solar (Nasdaq: SOLR) since September 2008.
“We are pleased with being able to execute this accretive transaction, which substantially reduces the large overhang of private equity share ownership,” said Tom Gutierrez, president and CEO of GT Solar, in the announcement.
Richard Gaynor, GT Solar chief financial officer, said the buyback would create value for shareholders. The company intends to re-purchase 26.5 million shares of its common stock at a price of about $7.66 per share, 13 percent below the stock’s closing price on Friday. GT Solar expects the transaction to close this Friday.
The transaction is expected to reduce the company’s outstanding shares from approximately 151 million to approximately 124 million, GT Solar officials said.
The company plans to use its available cash initially to fund the transaction, but it has also obtained a commitment from Credit Suisse for a senior secured credit debt financing of up to $200 million. Though the company has cash available to fund the re-purchase, the debt financing will give the company “continued flexibility moving forward,” Gaynor said.
Along with the resignation of Forth, R. Chad Van Sweden, also of Oaktree Capital Management, also intends to resign from the board after the re-purchase closes, GT Solar said.
This summer, GT Solar said it had shipped its 1,000th crystalline ingot growth furnace in its top line of furnaces, DSS450. The furnace, used in photovoltaic manufacturing, was introduced in 2007 by the company.
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