SolarEdge Technologies Inc. on May 9 announced that it will acquire Israel-based Gamatronic Electronic Industries Ltd., a company that specializes in uninterruptible power supply systems.
"This acquisition is our first step in expanding our business to new fields outside the solar arena," SolarEdge CEO and Chairman Guy Sella said in a company release. "The multi-billion dollar [uninterruptible power supply, or UPS] market is expected to undergo significant changes in the coming years, and we believe that combining SolarEdge's innovation, operational excellence and business leadership with Gamatronic's technology and extensive experience in this field will allow us to become a UPS market leader."
SolarEdge will purchase all of Gamatronic's assets, including its intellectual property, brand and tangible assets. The deal is expected to close by the end of the second quarter, subject to customary closing conditions. After the transaction is complete, SolarEdge will rehire about 100 of Gamatronic's employees.
Gamatronic develops, manufactures and sells UPS electrical devices, which provide emergency power to appliances when the input power source fails. Founded in 1970, Gamatronic exports its products to the United States, China, Europe, South Africa and Latin America. SolarEdge develops and sells direct-current inverter systems for solar photovoltaic installations.
During the company's earnings call, Sella said the acquisition is expected to have minimal contribution to SolarEdge's 2018 revenues. Gamatronic's UPS business will serve as a basis for a new SolarEdge business unit.
On the earnings front, SolarEdge booked first-quarter 2018 non-GAAP net income of $42.6 million, or 87 cents per diluted share, up from $16.5 million, or 36 cents per diluted share, in the same quarter in 2017.
GAAP net income for the quarter totaled $35.7 million, or 75 cents per diluted share, compared to $14.2 million, or 32 cents per diluted share a year ago. Total revenues for the quarter were $209.9 million, up 82% from $115.1 million year over year. Cash flow from operating activities was $64.0 million, up from $25.7 million in the first quarter of 2017. During the quarter, the company shipped 800 MW (alternating current) of inverters.
For the second quarter, SolarEdge targets revenues in the range of $220 million to $230 million and expects gross margins to remain flat in the range of 36% to 38%.