Unirac, a Greenbelt Capital Partners-backed manufacturer and supplier of racking and mounting for solar panels, expects to complete at least one acquisition before the end of 2023 to grow its geographic footprint, said Greenbelt partner Chris Murphy.
The Albuquerque, New Mexico-based company, which generates significantly more than USD 100m in annual revenue, is most interested in targets that will expand its portfolio of attachments and racking products, he said. Targets could include whole businesses or assets, he added, declining to disclose target size.
M&A could help Unirac establish a European presence, as well as grow its US business, said Murphy, who declined to disclose specific regions. It currently runs production and warehousing operations in Colorado, Ohio, New Jersey and Southern California, Murphy said. The company also has a large engineering team in India.
Growth will be financed through a combination of internal funding and support from Greenbelt, according to Murphy.
Greenbelt participated in a recapitalization of Unirac in October, during which it became majority owner, a position previously held by Tenex Capital Management, which continues to own a significant stake in the business. Trilantic Energy Partners also participated in the investment. Tenex acquired Greenbelt in 2016. Terms were not disclosed for any of these transactions.
Unirac CEO Peter Lorenz told the Albuquerque Journal in April 2021 that the company saw revenue grow 30% compared to the previous year in the wake of the COVID-19 pandemic. Murphy said the company anticipates growth to be “well in excess of GDP” by the end of 2022 and beyond.
Unirac produces racking and mounting equipment used to affix solar panels on the rooftops of residential, commercial, and industrial— or RCI— buildings. Murphy said he expects the company will remain focused on that specialty.
Unirac uses an international network of contract manufacturers to produce components, and Murphy said it will continue to broaden the number of relationships but declined to disclose details.
When asked about competitors in the solar infrastructure space, Murphy named Netherlands-based Esdec Solar Group, which received a minority investment from Blackstone in July. Esdec’s majority owner remains Rivean Capital, which acquired the company in 2018.
Unirac could consider an initial public offering in the long-term future among other strategies, but Greenbelt has no specific exit plans at this point, he added.
Greenbelt’s investment in Unirac came amid a convergence of tailwinds in the solar industry, noted Murphy, who referred to the passage of the Inflation Reduction Act in August. The act provides tax credits for residential property owners that install solar panels. The declining cost of solar panels also played into the firm’s decision to invest in Unirac.
The company currently has more than 130 employees and projects additional hires in the next year, Murphy said.
BDO provides accounting services to the company.
On the recent recap, Kirkland & Ellis served as legal counsel to Greenbelt and Trilantic. Cowen and Lazard served as financial advisors and Koley Jessen acted as legal counsel to Unirac.