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Nextpower's Planned Prevalon Acquisition Pairs Well With Inverter Business, RBC Says

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Nextpower's (NXT) planned acquisition of Prevalon Energy is an opportunity to add value in power electronics and pairs well with its inverter business, RBC Capital Markets said in a Thursday note.

The company agreed to acquire Prevalon Energy, a US joint venture between Mitsubishi Power Americas and EES, for up to $365 million in cash and stock. The deal will enable Nextpower to provide more integrated offerings in solar and storage, allow integrations of its power controls and inverters business into battery energy storage systems, and give access to existing Prevalon customers, according to the note.

Nextpower's existing relationships and strong reputation will be a key differentiator in a competitive landscape, with rival firms having a more limited scope, the firm said. The company will be able to offer bundled solutions with its solar trackers, foundations, and Electrical Balance of System products, the note said.

RBC maintained the company's stock rating at outperform and raised the price target to $149 from $146.

Price: $154.38, Change: $+17.21, Percent Change: +12.55%

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