One year after jumping into the U.S. solar market, Dutch racking company Esdec has bought its way to the top.
This week Esdec announced acquisitions of two U.S. racking companies: IronRidge and Quick Mount PV, both headquartered in California. Combined with its purchase of Arizona-based EcoFasten last year, Esdec said its U.S. portfolio now commands 60 percent of the U.S. residential racking market.
Esdec declined to offer specifics on the costs of the deals.
The companies also declined to break out their individual revenues or market shares, but Esdec said its combined U.S. portfolio rakes in $250 million of revenue per year.
The residential solar sector in the U.S. is in the midst of a rebound after a slight dip in 2017, and Esdec is angling to take a slice of the growing market. Analysts at Wood Mackenzie Power & Renewables project 5 to 20 percent growth in the sector through 2021 as the coming stepdown of the investment tax credit prompts more customers to go solar.
Each company said joining Esdec’s portfolio would afford it more funds and a lower cost of capital for growth.
Executives at IronRidge, Quick Mount PV and EcoFasten also said each would have access to a wider base of intellectual property and be able to capitalize on the strengths of its peers. IronRidge focuses only on distributors, for instance, with no direct installer customers, while EcoFasten said its rail-less system is top of market.
“Installers are going to be able to get the best portfolio of high-quality products,” said Yann Brandt, CEO at Quick Mount PV. “As these installation companies grow and continue to need to grow, they want more products, they want them faster, they want continued innovation. And now they know exactly the one source, the one family of companies, to go to.”
Put another way: Esdec companies reason that their cornering of the market means installers will have an easy choice when looking for product. The group hopes the stacked line-up of its portfolio will provide certainty in an environment where policies are not.
“[Installers] don’t want to hear about trade and tariffs and the ups and downs of the market,” said Brandt. “They’re looking to install solar on a roof every single day, and they want to do it faster and they want to do it more cost effectively.”
“With all the companies now, we have a very complete if not the most complete portfolio of products and application solutions,” added Bart Leusink, chief commercial officer at EcoFasten.
Though each brand will continue to operate independently, the companies said joining forces will cut costs on research and development as well as certification testing. Rather than buying individual slots to test products, the company can share expensive “chamber time” and test a mixture of products.
Despite Esdec’s base in Europe, the group said its U.S.-based companies have no current plans to sell into the European market.
Source: Greentech Media