By Dr. Cameron Chai
JA Solar, a manufacturer of solar power products and solar cells, has entered into an agreement with a British Virgin Islands Company, Silver Age, to acquire Solar Silicon Valley Electronic Science and Technology company, a China-based firm specializing in solar wafers and quartz crucibles.
The deal, valued at approximately $180 million, aims to expand JA Solar’s internal wafer capacity from 485 MW to 785 MW.
Solar Silicon Valley’s wafer production facility has a 485 MW annual production capacity. It is situated in the Yanjiao Economic & Technology Development Zone, in the Langfang City of Hebei Province. The Jinglong Group owns 70% of Silver Age and a third party shareholder owns the other 30%. Mr. Baofang Jin, Chairman of JA Solar, controls the Jinglong Group.
JA Solar is to issue 30.901 million ordinary shares at $5.825 per share at the closure of the transaction. This represents volume-weighted average price for 45 days trading of JA Solar's NASDAQ Global Market ADSs. Each JA Solar ADS is equivalent to one ordinary share. The price will be about 5% premium to the final closing price of the ADS before the announcement of the acquisition.
The cost of wafers constitutes a major part of total solar cell manufacturing expenses. The acquisition will augment JA Solar's internal wafer capacity, improve gross margins, reduce costs and ensure a constant supply of wafers.