GT Solar Buying Back 26.5M Shrs From Investor Group At $7.66

Posted by Eric Savitz

GT Solar (SOLR) this morning said it has agreed to buyback 26.5 million shares now held by GT Solar Holdings, which is controlled by the company’s private equity investors, GFI Energy Group and Oaktree Capital Management. Terms call for SOLR to buy back the stock for $7.66 a share, or about $203 million. The purchase will cut shares outstanding to 124 million from 151 million. The purchase will be funded with cash on hand. After the transaction closes, SOLR will still have over $110 million in cash and equivalents,

The company, which sells manufacturing equipment to the sold sector, also said it has obtained a commitment from Credit Suisse for a senior secured credit facility of up to $200 million.

In connection with the transaction, directors J. Bradford Forth and R. Chad Van Sweden have resigned from the board; Forth will be replaced as chairman by Matt Massengill, a director who is a former CEO of Western Digital.

The company also said GT Solar Holdings sold an additional 7 million shares to a third party in a Rule 144 transaction. After the transactions, GT Solar Holdings will own 17.6 million shares, which are subject to a lock up agreement that expires December 9.

Reflecting the reduced share count, the company now sees EPS for the March 2011 fiscal year ranging from $1.08 to $1.18 a share, up from a range of $1 to $1.10.

On Friday, SOLR posted revenue for its fiscal second quarter ended October 2 of $229.3 million, with profits of 28 cents a share; the Street had been projecting $199.2 million and 24 cents.

Raymond James analyst Pavel Molchanov this morning raised his rating on SOLR to Outperform from Market Perform, citing signs of strengthening demand in the solar sector.

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