Shoals Technologies Group (NASDAQ:SHLS) and ARRAY Technologies announced plans to combine in a stock-for-stock merger, forming an integrated energy-infrastructure platform focused on utility-scale solar and adjacent markets. The companies expect the transaction to close in the first quarter of 2027, subject to shareholder and regulatory approvals.
Under the agreement, ARRAY will be the surviving legal entity and each Shoals shareholder will receive 1.6931 shares of ARRAY stock for each Shoals share held. Shoals shareholders are expected to own approximately 65% of the combined company’s basic shares outstanding, while ARRAY shareholders will own the remaining 35%.
Following the closing, Shoals CEO Brandon Moss will lead the combined company as chief executive officer, while Brad Forth will remain chairman. ARRAY CEO Kevin Hostetler will transition to a special advisor role. The companies plan to announce a new corporate name and ticker symbol in the coming months.
Combined platform targets solar cross-selling and product integration
Management said the merger will bring together Shoals’ electrical balance-of-system, or EBOS, offerings with ARRAY’s structural balance-of-system, or SBOS, portfolio. ARRAY’s portfolio includes trackers, APA engineered foundation solutions and Affordable Wire Management, or AWM.
Moss said the companies believe a broader offering could simplify procurement and installation for developers and engineering, procurement and construction firms, while reducing the number of vendors involved in utility-scale solar projects. The combined company intends to continue offering customers choice across its portfolio rather than requiring bundled purchases.
Executives highlighted cross-selling as a central commercial opportunity. According to Moss, only 20% of project volume since 2025 used products from both companies, meaning 80% involved products from only one of the companies. He said that supplying the combined product suite across every project the companies had touched would have represented $2.5 billion in incremental sales.
“We do not need to capture all of this opportunity to create meaningful value,” Moss said, adding that even partial conversion of existing customer relationships could contribute to revenue growth and earnings.
The companies also outlined potential product-development opportunities, including tracker torque tubes designed with attachment points for Shoals’ BLA system, integrated wire-management and tracker designs, pre-engineered EBOS and SBOS kits, and digital tools coordinating mechanical and electrical project layouts.
Synergy target exceeds $100 million by year three
The companies are targeting more than $100 million in annual run-rate synergies by the third year after closing, including cost and commercial synergies. They expect $35 million of run-rate synergies in the first year, with more than half coming from cost savings such as reduced duplicate public-company expenses, corporate overhead consolidation, procurement leverage and operating efficiencies.
By year three, Moss said the synergy mix is expected to shift toward commercial benefits, with roughly two-thirds from commercial initiatives and one-third from cost reductions.
- Cross-selling the combined product portfolio to existing customers
- Increasing ARRAY tracker market share through expanded customer engagement
- Expanding Shoals’ international reach through ARRAY’s global footprint
- Developing integrated products that increase content per project
Hostetler said ARRAY’s direct relationships with tier-one developers and utilities could enable the companies to become specified earlier in the project-design process. He said more than half of ARRAY’s order book has been direct with tier-one developers and utilities.
Management also cited international growth potential. Shoals has built an international order book of about $100 million, Moss said, while ARRAY has a more established international sales infrastructure and presence in markets where Shoals has had less penetration.
Preferred stock reduction and balance-sheet plans
ARRAY’s Series A preferred stock will be a financial priority for the combined company. In connection with the merger, ARRAY agreed to redeem $161.3 million of preferred stock within 90 days after closing at $0.93 on the dollar. The companies also committed to redeeming an additional $156.3 million over the following three years at $0.96 on the dollar, in annual amounts of no less than $52 million.
Management said the planned redemptions would reduce preferred stock outstanding by more than 60% and save nearly $100 million in future distributions over five years. The company may elect to redeem additional preferred shares earlier, according to Hostetler.
The merger structure preserves ARRAY’s existing financing and avoids the need to refinance its debt, Moss said. The combined company is expected to have net debt-to-Adjusted EBITDA of 2.6 times on a pro forma 2026 basis, declining to less than two times in 2027.
Management’s preliminary 2027 outlook calls for revenue of $2.2 billion to $2.4 billion and Adjusted EBITDA, including synergies, of $410 million to $480 million. The estimate is supported by approximately $3.4 billion in combined backlog and awarded orders as of Sept. 30, according to the companies.
Third-quarter results show strong order activity
Alongside the merger announcement, both companies reported third-quarter results.
Shoals reported record revenue of $195.3 million, up 44% from the prior year, and Adjusted EBITDA of approximately $40 million, or 20.4% of revenue. Gross profit margin was 31.9%, improving 160 basis points from the second quarter. Shoals added about $186 million in new orders and generated operating cash flow of $28.9 million, which it used in part to repay $33 million on its revolving credit facility.
ARRAY reported third-quarter revenue of $330 million, including one month of contribution from AWM following its Aug. 31 acquisition. Revenue excluding AWM was $321 million, the company said. ARRAY’s order book reached $2.6 billion, up 42% year over year, while it booked more than $400 million in new orders for the fifth consecutive quarter.
ARRAY reported Adjusted EBITDA of $32 million, or a 10% margin. Its adjusted gross margin was 22.8%, including a 330-basis-point charge related to a reserve for a long-dated 45X rebate with a supplier. Hostetler said AWM was accretive to both margins and earnings in its first month of inclusion.
About Shoals Technologies Group (NASDAQ:SHLS)
Shoals Technologies Group, Inc develops electrical balance-of-system (EBOS) solutions for solar energy projects. Its products connect, protect, combine and monitor the direct-current electrical output of solar panels before electricity is converted and delivered to the broader power system.
The company’s product portfolio includes wire harnesses, junction boxes, inline fuses, disconnects, recombiners, communication and monitoring equipment, and other electrical components used in photovoltaic installations.
