Blackstone Inc. is considering a potential acquisition of Growatt Technology Co. that could value the Chinese solar equipment maker at about $1 billion, according to people with knowledge of the matter.
The buyout firm has sounded out lenders for financing, said the people, who asked not to be identified as information is private. Growatt is holding talks on a potential sale after market volatility made it more difficult to proceed with its planned Hong Kong initial public offering, the people said.
Deliberations are ongoing and there’s no certainty a transaction will happen, the people said. There could also be other interested parties for Growatt, they added. A representative for Blackstone declined to comment, while a representative for Growatt didn’t immediately respond to requests for comment.
Tracing its roots to 2010, Growatt develops and manufactures solar inverters, energy storage systems, electric vehicle chargers and smart energy management systems, according to its IPO prospectus. The company’s production facilities have an annual capacity of about 2.4 million solar inverters, in addition to manufacturing energy storage inverters and battery packs. Sequoia Capital, whose Chinese unit is set to be spun off and renamed HongShan, is one of the backers of the firm.
The Shenzhen-based company had been planning a Hong Kong initial public offering and won approval from the city’s stock exchange in November. China International Capital Corp. and Credit Suisse were the sponsors of the IPO. The company didn’t launch the share sale after gauging investor demand in May.
Chinese manufacturers are boosting their capacity to produce solar equipment across the value chain, prompting concern about excess supply. The president of Longi Green Energy Technology Co., the world’s largest solar equipment maker, said in May that more than half of China’s solar manufacturers could be forced out in the next two to three years if the current aggressive expansion of manufacturing capacity continues.
--With assistance from Cathy Chan and Sarah Chen.
(Updates with solar equipment capacity in last paragraph.)