Inox Clean Energy to Acquire US-based Boviet Solar for $750 Million

Inox Clean Energy is set to acquire Boviet Solar in a deal that could assign an enterprise value of about $750 million (around Rs 7,000 crore) to the San Jose, California-headquartered company, said people familiar with the development. The move is aimed at establishing the privately owned Noida-based renewable energy company's presence in the US, according to the people.

Boviet ranks among the top 10 solar equipment makers in the US. Enterprise value factors in debt and cash holdings, making it a more composite measure of a company's total value than equity value alone. Boviet Solar's parent company, Chinese diversified industrial group Ningbo Boway Alloy Material, announced a strategic review of its US business about two months ago, sparking speculation about an imminent sale. It said at the time that there were "ongoing trade and policy challenges" for US solar products and "changes to US subsidy eligibility, which have influenced parent-level capital allocation considerations."

Multiple Chinese solar equipment manufacturers have reviewed their US investments over the past six-eight months in the face of stiff regulatory scrutiny of Chinese equipment under the Trump administration. Inox Clean Energy sees this as an opportunity to tap into the US market for residential, commercial and industrial solar energy installations and expand its international footprint, according to people with knowledge of the matter.

Inox Clean Energy generates green power and manufactures solar equipment such as cells and modules through two companies — Inox Neo Energies and InoxSolar Ltd. It plans to scale up solar cell and module capacity as well as installed green energy generation capacity. Recently, it announced an investment from a group of investors including the California Public Employees' Retirement System, the largest defined-benefit public pension fund in the US, which valued Inox Clean Energy at $5.5 billion.

Inox Clean Energy is part of the diversified INOXGFL group, which has interests in fluorochemicals, battery materials manufacturing, wind and solar equipment, power generation and operations and maintenance of wind farms. The company had filed confidentially for an initial public offering in July last year but withdrew its draft red herring prospectus in December to focus on fundraising and acquisitions. It then went on to acquire Macquarie-owned Vibrant Energy, an Indian renewable energy company that supplies electricity to Amazon's establishments in the country. It also announced the acquisition of a solar projects portfolio from SunSource Energy, the Indian arm of the Netherlands-based SHV Energy.

The US tightened its Foreign Entity of Concern guidelines last year to restrict Chinese-origin suppliers from accessing clean energy tax credits. This triggered a review by Chinese solar equipment companies with a US presence. China's JA Solar recently sold its Arizona facility to US material sciences firm Corning Inc. Similarly, Chinese solar photovoltaic firm Trina Solar sold its US facility to T1 Energy.

Inox Clean Energy's renewable energy generation arm, Inox Neo Energies, is targeting an installed generation capacity of 10 gigawatts by 2028. Inox Solar aims to set up 11 GW of solar module manufacturing capacity and 8 GW of solar cell manufacturing capacity during this period.