Albuquerque-based solar manufacturer Array Technologies Inc. expects to start trading on the Nasdaq this week in what could be the biggest initial public offering for a homegrown New Mexico company in state history.
The company will offer 33.8 million shares on the Nasdaq Global Market for the first time this week under the ticker symbol “ARRY,” potentially raising about $675 million at an average price of $20 per share, according to a draft registration statement Array filed Oct. 7 with the U.S. Securities and Exchange Commission.
The sale could raise Array’s total market capitalization to about $2.5 billion, because the company’s outstanding common stock after the Nasdaq offering will reach nearly 127 million shares.
Oaktree Capital, which purchased majority ownership in the private company in 2016, is selling about 26.8 million of its shares, and Array executives are offering 7 million.
The company could not be reached for comment. But prominent local business leaders said the estimated value of Array’s IPO would be unprecedented in New Mexico.
“I’m not aware of any other situation that would even be close to that,” said Sherman McCorkle, chairman of the Sandia Science and Technology Park and former head of the now-defunct Technology Ventures Corp., which worked for more than two decades to help local technology companies launch and grow.
“In New Mexico, we’ve tried for years to create an environment where technology companies could be conceived, created and at some point go public,” McCorkle said. “This is a huge success, not just for Array, but for the state in general. New Mexico should celebrate this achievement.”
John Chavez, a longtime local investor and former president of the New Mexico Angels, said most public companies in New Mexico are small, penny-stock firms that trade on the Over-the-Counter Bulletin Board, or OTCBB. Until now, PNM Resources, which is listed on the New York Stock Exchange, has been the only large publicly traded firm that’s headquartered here.
“There’s only a few small companies listed on the ‘pink sheets’ (OTCBB) in Santa Fe,” Chavez said. “This is what people dream of when they start companies – to go public. Many think it can’t happen in New Mexico, and this shows that it can. It’s a great day for the state.”
New Jersey native Ron Corio, who moved to New Mexico in 1979, launched Array Technologies in 1989 after designing and developing solar trackers, which are used to tilt and turn solar panels to follow the sun, increasing electric output from photovoltaic arrays. Corio built the company from scratch into one of the largest solar-tracker manufacturers in the world.
As of last June, Array had supplied more than 14 gigawatts of solar trackers in the U.S., representing nearly 30% of the total utility-scale solar generation capacity installed across the nation, according to the company’s SEC filing. It has another 3 GW installed on solar systems in other countries.
The company grew fairly steadily in its early years, but it’s business ramped up when utility-scale solar generation began to boom across the nation about 10 years ago. It reached $38 million in annual revenue in 2010, when it stopped publicly reporting its finances.
Now, however, Array’s SEC filing shows spectacular growth over the past decade, with $648 million in annual revenue for 2019. And sales are surging even faster this year, approaching $553 million for the first six months of 2020, up from $225 million in the same period last year.
The company employed 343 people as of June 30, with nearly $924 million in total assets. That includes a 43,000-square-foot manufacturing facility and 26,000 square feet of office and warehousing space it owns in Albuquerque. It also leases 2.7 million square feet of warehousing in five other states.
‘About to soar’
Market analysts say Array’s IPO could attract significant interest, because solar deployment is still booming in the U.S. and elsewhere as non-carbon generation replaces fossil fuels. That offers Array a lot more room for growth, especially overseas, where use of tracking systems on solar arrays has lagged behind that in the U.S.
And the domestic market could grow a lot more if former Vice President Joe Biden wins in the Nov. 3 presidential election, paving the way for the Democrats’ plan to invest $2 trillion in sustainable energy projects, said Sarah Smith, web content producer for the market publication InvestorPlace.
“This could mean that Array Technologies is about to soar,” Smith wrote on Monday in a story about the company’s forthcoming IPO. “… This could be one of the hottest deals this week.”
Smith said solar stocks are “incredibly hot,” with major rallies in recent weeks for Nasdaq-traded SPI Energy and Sunworks, and for JinkoSolar, which is listed on the New York Stock Exchange.
That’s a sharp reversal from the early years of the solar boom, when many companies fared poorly on public markets, said Ryan Centerwall, CEO of Affordable Solar, New Mexico’s largest installation company.
“Solar had a fairly rocky track record for public companies in the past, with some major businesses failing over the years,” Centerwall told the Journal.
But Array’s success shows solar is a rising star, Centerwall said.
“Array is a New Mexico success story,” he said. “That company was created here and grew over the years from very humble roots. It’s great news for the state, and for the solar industry in general.”