ZURICH: Swiss solar equipment maker Meyer Burger is buying Roth & Rau in an agreed cash and share deal which values the maker of production equipment for solar cells at 356 million euros ($512.7 million).
Meyer Burger Chief Executive Peter Pauli told Reuters the deal was a sign of booming interest in renewable energy since the nuclear crisis in Japan.
"Today we are ready, also from the technical side, to start to replace existing sources of energy," he said in a telephone interview.
Meyer Burger said it had bought 11.3 percent of Roth & Rau's shares through share purchases and share exchanges and is issuing 840,802 new shares as part of those contracts, which are expected to start trading on Wednesday.
The Swiss firm said in a statement it is also launching a takeover offer for the remaining Roth & Rau shares of 22 euros per share, valuing the firm at 356 million euros based on 16.2 million shares outstanding.
"The transaction makes strategic sense but poses integration challenges and comes at a hefty price," said Vontobel analyst Michael Foeth, saying Meyer Burger was paying 8.5 times 2011 earnings before interest, tax, depreciation and amortisation.
Roth & Rau shares jumped 14 percent to 22.50 euros, while Meyer Burger's slipped 3.9 percent to 39.90 Swiss francs. Both stocks have soared as the renewable energy sector has risen after Japan's nuclear crisis.
Meyer Burger said it will finance the takeover offer from its existing cash position and through a syndicated bank loan.
Last month, the group said it saw 2011 sales rising to 1.2 billion Swiss francs after nearly doubling in 2010 as it expects its strong position in both Asia and Europe to help it benefit from capacity expansions by solar cell manufacturers.
The executive board and board of directors of Germany-based Roth & Rau support the offer. Rau & Rau had sales of 285 million euros in 2010 and employed over 1,200 people.
Roth & Rau CEO and co-founder Dietmar Roth is proposed for election to the board of directors of Meyer Burger.
Meyer Burger CEO Pauli said the deal should help efficiency in the industry, adding he sees solar getting under the target of $1 per kilowatt-hour of power between 2013 and 2015.
"This is just another step to sustainably reduce the costs of solar power and to help achieving the industry goal of grid parity as fast as possible," he said.
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