Shoals Technologies Group, Inc. has announced a $150 million share repurchase program, indicating the company's confidence in its business and long-term growth potential. The authorization, effective through December 31, 2025, allows for repurchases to be made through various means, including open market purchases and privately-negotiated transactions.
In connection with the share repurchase authorization, Shoals has entered into an accelerated share repurchase agreement (ASR) with Jefferies LLC to repurchase $25 million of the company’s Class A common stock. Under the terms of the ASR, Shoals will receive an initial delivery of approximately 2,202,643 shares of Class A common stock, representing about 60% of the notional amount of the ASR, based on the closing price of $6.81 on June 10, 2024. The ultimate number of shares repurchased pursuant to the ASR will be based on the daily volume weighted average price per share of Shoals’ Class A common stock during the term of the ASR, less an agreed-upon discount.
Dominic Bardos, Shoals’ Chief Financial Officer, highlighted that the share repurchase program is part of the company's value creation strategy, and they will continue to evaluate potential uses for their cash flow, including investing in new technology, making strategic acquisitions, reducing debt, and repurchasing shares.
The company has also emphasized that, other than the ASR, the repurchase program does not obligate Shoals to repurchase shares of Class A common stock, and the specific timing and amount of repurchases will vary based on available capital resources, financial and operational performance metrics, market conditions, securities law limitations, and other factors.
In light of these announcements, investors and stakeholders will be keen to see how these initiatives impact the company's financials in the upcoming quarters. Following these announcements, the company's shares moved 9.9%, and are now trading at a price of $7.49. For more information, read the company's full 8-K submission here.
