Nextpower Closes Zimmermann At €230 Million, All Cash, With A Smaller Outlook — 'Nothing Fundamental Has Changed'
The solar tracker maker closed its European steel deal for less than announced in June and lowered expectations for the business to about $100 million of revenue.
Nextpower, which makes solar tracking systems and the electrical equipment and software around them, closed its purchase of Zimmermann PV Steel Group last week for a lower price than first announced, CFO Chuck Boynton said on the company's earnings call Wednesday. Total consideration is 230 million euros, now all cash, and Boynton cut expectations for the business to about $100 million of revenue and $10 million of adjusted EBITDA for the rest of the fiscal year.
Lower price, lower forecast
Boynton said the 230 million euro price is below what Nextpower previously announced, and the structure changed to all cash. He still expects the deal to add to earnings from the start.
Asked by a JPMorgan analyst why both the price and the outlook came down, President Howard Wenger said the deal was announced in June and closed a couple of weeks ago. In the interval, he said, the team studied Zimmermann's backlog, forecast and pipeline and conformed them to Nextpower's own forecasting method.
"Nothing fundamental has changed," Wenger said, calling the revision "just a different way of forecasting." He said Zimmermann had a very strong first half and is a mature, profitable private company.
What Zimmermann adds
Wenger said Zimmermann brings more than 20 gigawatts of cumulative project experience and adds 15 countries, taking Nextpower to 68. The company is strong in Germany, where a material part of its business sits, and sells fixed-tilt steel structures, agrivoltaics products and wire management, none of which Nextpower had in the fixed-steel category.
Zimmermann's outlook is in Nextpower's guidance, Boynton said, but its backlog is not in the company's backlog. He described it as more of a turns business, meaning orders that convert quickly, and expects little effect on backlog when third-quarter results come out.
A record quarter around the deal
Nextpower reported second-quarter revenue of over $1.1 billion, up 23% from a year earlier, and adjusted EBITDA of about $250 million, up 12%. Backlog grew to over $6 billion. It ended the quarter with over $1 billion of cash and no debt.
Boynton raised fiscal 2027 guidance to revenue of $4.2 billion to $4.45 billion and adjusted EBITDA of $890 million to $940 million. Nextpower's market value was $12.1 billion on Wednesday.
Management said it will give more detail on its outlook and strategy at its Capital Markets Day in Las Vegas on November 16.
Sources
- Nextpower: Fiscal Q2 Earnings Snapshot – WTOP News — wtop.com
- Nextracker Non-GAAP EPS of $1.31 beats by $0.21, revenue of $1.10B beats by $40M (NXT:NASDAQ) | Seeking Alpha — seekingalpha.com
- Nextpower (NXT) Stock May Trade At A Discount On Growth Coverage — Yahoo Finance
