GT Solar International, a provider of polysilicon production technology and sapphire and silicon crystalline growth systems and materials for the solar and LED markets, has entered into a definitive agreement to repurchase shares of common stock from GT Solar Holdings, whose members include all of the company’s private equity investors.
Under the terms of this agreement, GT Solar has agreed to purchase 26.5 million shares of its common stock at a price of approximately USD7.66 per share for a total purchase price of approximately USD203m.
The share repurchase is expected to close on or before 12 November 2010.
As a result of the repurchase, the company’s shares outstanding are expected to be reduced from approximately 151 million to approximately 124 million.
The company will use its available cash to initially fund the transaction.
Following the repurchase of these shares, the company expects to have over USD110m in cash and cash equivalents and short-term investments.
In connection with the repurchase, the company obtained a commitment from Credit Suisse for a senior secured credit facility of up to USD200m.
"We are pleased with being able to execute this accretive transaction which substantially reduces the large overhang of private equity share ownership," says Tom Gutierrez, GT Solar president and chief executive officer. "We continue to have a solid cash balance and we believe the business will continue delivering consistent cash flow, giving us the ability to make future investments in our solar and sapphire businesses as well as to evaluate additional strategic opportunities that enhance shareholder value."
J. Bradford Forth and R. Chad Van Sweden, both of the GFI Energy Group of Oaktree Capital Management, an investment manager of the two private equity funds that serve as the managing member of GT Solar Holdings, have resigned from the board effective upon the closing of the repurchase. The board will initiate a search for two new independent directors.
Matt Massengill, former chairman and chief executive officer of Western Digital Corporation and a GT Solar director since September 2008, will assume the chairmanship role effective with the resignation of Forth.
