The drumbeat of consolidation in the solar industry continues this morning, as silicon wafer maker and solar project developer MEMC Electronic Materials (s WFR) has just announced plans to acquire Solaicx, an 8-year-old maker of silicon wafers for solar cells.
The deal, according to a release from MEMC today, includes $66 million in cash and up to $10 million on top of that “based on incoming investment.” In addition, if Solaicx meets certain performance targets set for 2010 and 2011, MEMC says it will pay up to $27.6 million in cash and MEMC stock to Solaicx security holders.
This latest acquisition, expected to close next month, comes as part of a long-anticipated shakeout in the solar industry. It also comes amid forecasts that 2010 will be a year of “gross oversupply” for solar modules and significant “consolidation.” As Pike senior analyst Dave Cavanaugh put it in a statement last week, there are “190 cell and module manufacturers, making consolidation of weaker competitors an inevitable outcome.”
Solaicx isn’t the first solar player to get snapped up by MEMC. Late last year MEMC announced that it would buy up SunEdison, one of the pioneers of the solar-as-a-service business model, for $200 million plus additional provisions.
Companies most likely to be bought up by incumbents include venture-backed players with incremental advances for crystal and silicon cell efficiency, Lux Research analyst Ted Sullivan has told us in an interview.
MEMC Solar Materials President Ken Hannah said in a statement Monday that the company hopes Solaicx’s manufacturing technology will enable MEMC to reduce costs and boost efficiency for monocrystalline silicon production. Solaicx President and CEO David Ranhoff added that combining the startup’s technology with MEMC’s large scale will allow Solaicx customers to see lower costs for solar electricity.
Since its founding in 2002, Solaicx has raised more than $50 million in venture capital from investors including Applied Ventures (the VC arm of chip maker Applied Materials (s AMAT), Big Sky Partners, Firsthand Capital Management, Labrador Ventures, Greenhouse Capital Partners and others.
Image courtesy of Solaicx