First Solar to Acquire skytron-energy - Analyst Blog

First Solar, Inc. FSLR has reached an agreement to buy skytron-energy, a subsidiary of AEG Power Solutions. This acquisition is a strategic step by the company to capitalize on the growing opportunities in the European solar market.

skytron-energy, a operations and maintenance company in Germany, has successfully installed monitoring and control systems in more than 600 plants across Europe. The capacity of the plants stands at an impressive 5 gigawatts (GW).

This is expected to expand First Solar's global O&M portfolio by over two-fold. Per the agreement, skytron-energy will operate as a subsidiary of First Solar while retaining its own brand identity. However, the financial details pertaining to the deal were kept under wraps.

We expect this deal to benefit both the companies significantly. First Solar will be able to enhance its global O&M offerings through skytron's high-quality O&M services and data monitoring technology. On the other hand, skytron could be able to take advantage of First Solar's strong sales, service network and installed base. Thus, this merger will provide innovative and consistent solutions along with substantial technological knowledge to solar power plant owners.  

As per a report by GTM Research, the O&M market size in Europe is expected to improve to 35 GW in 2017 from 25 GW in 2013. This latest buy will thereby help First Solar to tap into the increased demand in the European market.  

The global demand for O&M services is on the rise primarily on the back of higher electricity production from solar energy. To benefit from this improved demand, solar companies like First Solar and Canadian Solar Inc. CSIQ among others are striving to improve their turnkey solar offerings.

First Solar presently has a Zacks Rank #3 (Hold). Investors interested in the solar industry may consider better-ranked stocks like JA Solar Holdings Co., Ltd. JASO and Yingli Green Energy Holding Co. Ltd. YGE. While JA Solar Holdings sports a Zacks Rank #1 (Strong Buy), Yingli Green Energy holds a Zacks Rank #2 (Buy).