Shoals and ARRAY Agree to Merge, Creating an Integrated Solar and Storage Infrastructure Platform

Shoals Technologies Group, Inc. (Nasdaq: SHLS) agreed today to combine with ARRAY Technologies (Nasdaq: ARRY) in an all-stock merger that brings two leading utility-scale solar equipment suppliers under one roof. Shoals shareholders will own about 65% of the combined company, and Shoals CEO Brandon Moss will lead it. At the same time, Shoals reported third-quarter revenue of $195.3 million, up roughly 44% from a year earlier, and raised its full-year outlook.

Key Points

• Shoals shareholders will receive 1.6931 ARRAY shares for each Shoals share and own approximately 65% of the combined company.
• The companies estimate indicative 2027 pro forma revenue of $2.2 billion to $2.4 billion and Adjusted EBITDA of $410 million to $480 million, including year-one synergies.
• Management expects more than $100 million in annual Adjusted EBITDA synergies within three years of closing.
• Shoals’ third-quarter net income rose to $17.9 million, while backlog and awarded orders reached $791.7 million.
• The companies expect the deal to close in the first quarter of 2027, subject to shareholder and regulatory approvals.

How the Shoals–ARRAY Merger Works

ARRAY will serve as the legal acquirer and corporate parent. However, Shoals holders will own the majority of the combined company: roughly 65% of basic shares outstanding, or 64.5% on a fully diluted basis, with ARRAY holders owning the remainder.

As part of the deal, ARRAY committed to redeem $317.5 million of its Series A Perpetual Preferred Stock. It will redeem $161.3 million within 90 days after closing and the remaining $156.3 million in three installments of at least $52 million each. The combined company also plans to announce a new name and ticker symbol in the coming months.

Leadership will tilt toward Shoals. Moss will become CEO, while ARRAY CEO Kevin Hostetler will serve as Special Advisor. Brad Forth, who currently chairs both boards, will chair the combined company’s ten-member board. That board will include four independent directors from each company plus Forth and Moss. Forth did not take part in either board’s vote on the deal.

Why Combine Structural and Electrical Systems

Shoals specializes in electrical balance-of-system (EBOS) products such as wiring and power delivery. ARRAY focuses on structural balance-of-system (SBOS) products, including trackers, foundations and fixed-tilt racking. Hostetler noted that the two categories have historically been designed and sourced through separate channels, even though they must work together in the field.

The companies see a sizable cross-selling gap. Only about 20% of projects the two served in 2025 and 2026 used products from both companies. As a result, management expects roughly $15 million of year-one run-rate Adjusted EBITDA from cross-selling, on top of about $20 million in year-one cost synergies.

The deal also offers tax benefits. Shoals brings approximately $1.6 billion of tax amortization and $237 million of net operating losses, which the companies expect to limit cash taxes for several years. Consequently, they do not expect to pay a material amount of cash taxes in 2027. Pro forma net debt should reach about $873.3 million at year-end 2026, or 2.6 times Adjusted EBITDA. The companies target leverage below 2 times by the end of 2027.

SHLS Third-Quarter Results Top Estimates

Shoals delivered a strong quarter alongside the merger news:

• Revenue: $195.3 million, up from $135.8 million a year earlier.
• Income from operations: $29.0 million, compared with $18.7 million.
• Net income: $17.9 million, or $0.11 per share, versus $11.9 million, or $0.07 per share.
• Adjusted EBITDA: $39.8 million, up from $32.2 million.
• Adjusted diluted EPS: $0.14, compared with $0.13.

Both revenue and adjusted EPS topped Wall Street’s consensus estimates. Still, profitability per dollar of sales slipped. Gross margin narrowed to about 32% from about 37%, and the Adjusted EBITDA margin eased to 20.4% from 23.7%.

Backlog and awarded orders totaled $791.7 million at September 30. That was up 9.8% year over year but down 1.2% from June 30. Shoals credited the annual increase partly to growth in emerging battery energy storage markets.

Looking ahead, Shoals guided fourth-quarter revenue to $165 million to $185 million and Adjusted EBITDA to $36 million to $40 million. It also raised its full-year 2026 outlook to revenue of $665 million to $685 million and Adjusted EBITDA of $129 million to $133 million.

What’s Next for SHLS

The companies held a joint call this morning in place of their separate earnings calls, and they plan to file proxy materials with the SEC by year-end. Before closing, both shareholder bases must approve the deal, and the combined company’s shares must receive Nasdaq listing authorization.

For investors, the merger offers scale, cross-selling potential and tax shields. At the same time, it adds integration risk, preferred-stock redemption obligations and nearly $900 million of net debt. Investors will watch closely to see whether Shoals can protect margins while it absorbs a business of ARRAY’s size.

Shoals is a constituent of the PRISM New Energy Index. For more background, read PRISM MarketView’s earlier coverage of Shoals’ first-quarter surge and its expansion into the AI data center market. Follow SHLS on its PRISM MarketView company page.