NEXTracker, a designer and builder of single-axis PV trackers, just got bought by Flextronics for $330 million, including an $85 million earnout.

Flextronics said in a release, "The addition of the leading-edge NEXTracker business, along with its chairman and CEO, Dan Shugar, and his team, will further expand Flex's solar capabilities in commercializing smart and connected energy technologies."

This is CEO Dan Shugar's second major solar acquisition. He helmed Powerlight when it sold to SunPower in the early days of solar. Nancy Pfund, an investor in NEXTracker at DBL Investors, was also an investor in Powerlight when she worked at JPMorgan.

NEXTracker will operate as a subsidiary, keeping its brand under the leadership of Shugar.

"Under the terms of the agreement, the initial cash consideration will be approximately $245 million, net of cash acquired, with an additional $85 million of potential contingent consideration upon achievement of future performance targets," according to a release.

Last year, NEXTracker announced a $25 million B round led by new investor SJF Ventures, along with Tennenbaum Capital Partners and existing investors Sigma Partners and DBL Investors. 

NEXTracker CEO Shugar left the CEO position at Solaria to spin out the tracker firm in 2013 after a year of incubation within the PV module maker. 

Shugar told GTM in a previous interview, "I don't know anyone who has ramped a company as fast as we have." 

Shugar just told us, "We delivered about 275 megawatts in 2014...but this year will be north of 2 gigawatts." He said that production capacity is being ramped to over 500 megawatts per month.

That manufacturing structure makes Flex a common-sense choice for acquirer.

Nancy Pfund, a partner at DBL Investors and a board member at NEXTracker, told GTM, “As we’ve seen over the past year or two, solar hardware is having an investment moment. Any companies that drive down costs and/or increase performance (think Zep and Silevo) are in a position to be attractive as the industry grows and industry players look for ways to increase system profitability. NEXTracker fits squarely in this space, as tracking systems can boost the economics of ground-mount solar farms in a significant way"

Pfund added, "Everyone knows that the global PV industry is growing fast, but many people don’t know that utility-scale systems are growing fastest, and that trackers are one of the fastest-growing PV applications, with 17 percent of global PV installed on trackers in 2013, projected to grow to 27 percent for 2017. In fact, NEXTracker is one of the fastest-growing companies in our portfolio.”

Shugar notes, "NEXTracker’s unimpeded row design also provides valuable cost savings for panel cleaning in the dusty Chilean desert, and minimizes site-grading requirements.”

In a previous interview, Shugar said, "Virtually every tracker system uses a mechanical interlock -- and that hasn't evolved a lot." He said that when his team was hammering out the requirements for their new tracker design, they determined that it needed to be individually driven, not interlocked (think Venetian blinds). With an interlocked system, "You can't drive through the system -- there is a mechanical impediment for fire access, washing and maintenance. Customers hate that."

Shugar rattled off the advantages of his firm's design: maintenance costs are lower, it's easier to clean, it can be driven through, grading requirements are decreased -- but the most prominent edge that NEXTracker has is this: "We [need] less steel, and at the end of the day, we win on less steel."

Shugar spoke of a 30 percent reduction in the number of piers -- which means saving on tens of thousands of foundations in each of the large Latin American projects his firm is building with SunEdison. SunEdison awarded NEXTracker contracts for up to 1.85 gigawatts' worth of ground-mounted trackers over the next three years.

In a previous interview, Shugar said that although there are more than 100 tracker makers, he regards Array Technologies as "the big dog of independent tracker companies." SunPower and First Solar have their own tracker designs. Other tracker vendors include SPG Solar, Sedona Energy Labs, PV Trackers and QBotix.

Trackers can improve a PV system’s output by up to 40 percent over a fixed-tilt array, according to the GTM Research report Solar PV Balance-of-System Markets: Technologies, Costs and Leading Companies, 2013-2016. Tracking systems have a larger area footprint per megawatt, so space-constrained areas will be less attractive for trackers. Typical land use for fixed PV can be 4 acres to 5 acres per megawatt, while a single-axis tracking system will use 4 acres to 7 acres per megawatt, depending mostly on module selection, according to the report.   

Global demand for solar trackers is expanding faster than the overall solar industry, as markets move to higher-irradiance locations where trackers provide convincing boosts in power production.