ARRAY Technologies and Shoals to Merge in All-Stock Transaction

On November 4, 2026, ARRAY Technologies (NASDAQ: ARRY) and Shoals Technologies Group, Inc. (NASDAQ: SHLS) announced an agreement to combine in a stock-for-stock merger, with ARRAY as the legal acquirer and corporate parent of the combined company.  Shoals shareholders are to receive 1.6931 ARRAY shares for each Shoals share under a fixed exchange ratio.  On that basis, Shoals holders are expected to own approximately 65.0% of the combined company’s basic shares outstanding and ARRAY holders approximately 35.0%.  The fully diluted split is approximately 64.5% and 35.5%, against an estimated 439.5MM basic and 442.1MM diluted shares at December 31, 2026.  The release states no aggregate transaction value, no implied per-share consideration and no premium.  Our reading is that this is less a takeover than an attempt to assemble a single balance-of-system supplier for utility-scale solar at a point when buyers appear to be consolidating their own procurement.

Closing is expected in the first quarter of 2027, subject to approval by shareholders of both companies, regulatory approvals, authorization for the combined company’s shares to be listed on Nasdaq and other customary closing conditions.  A joint proxy statement and Form S-4 are expected, with additional financial detail by year-end.

Transaction Overview

The most distinctive feature of the structure is the inversion between legal form and economic outcome.  ARRAY is the acquirer and the parent entity, yet its shareholders are expected to hold roughly a third of the combined equity, and the leadership slate follows the economics rather than the legal structure.  Brandon Moss, currently CEO of Shoals, is to become CEO of the combined company, and Kevin Hostetler, currently CEO of ARRAY, is to become a Special Advisor.  The board is to be comprised of ten directors:  four independent directors from each company’s current board, plus Brad Forth and Mr. Moss.

Mr. Forth currently serves as Chairman of the Board of both ARRAY and Shoals, and he is to chair the combined company.  Board approval was unanimous among voting directors, and Mr. Forth did not participate; a special committee was also involved.  Those steps appear to be a conventional response to a shared chairmanship, and the proxy materials will likely set out how the negotiation was conducted.

The financial claims are measured.  Management points to more than $100.0MM of annual Adjusted EBITDA synergies within three years following closing, of which approximately $20.0MM of incremental run-rate Adjusted EBITDA is attributed to year-one cost actions and approximately $15.0MM to year-one cross-selling.  With projected net debt of $873.3MM at December 31, 2026, net debt to Adjusted EBITDA is expected to be 2.6x as of year-end 2026, and the companies estimate it falling below 2.0x by year-end 2027.  No material cash taxes are expected in 2027, helped by approximately $1.6Bn of tax amortization at Shoals, and the release makes no claim of earnings accretion.  ARRAY’s preferred stock, which carries a $348.7MM liquidation preference, is subject to a $317.5MM redemption commitment that begins at 93.0% of preference within 90 days of closing.  A new corporate name and ticker are expected in the coming months.

The Cross-Sell Case

The commercial argument rests largely on one disclosed statistic.  Only approximately 20.0% of the projects ARRAY and Shoals served in 2025 and 2026 used products from both companies, across a base that the companies estimate at more than 250 GW of projects.  If that figure is representative, the opportunity set looks large relative to the overlap, which is an unusually clean setup for a cross-sell thesis.  The caution is that low historical overlap can reflect customer preference, specification practice or procurement routine rather than a gap waiting to be filled, and the approximately $15.0MM first-year target seems appropriately modest.

The product logic is coherent on its face.  The combination brings foundations, trackers, fixed-tilt racking, electrical infrastructure, wire management and power delivery systems all under one supplier.  The companies point to a unified design package, coordinated purchasing and integrated warranty support as the mechanisms that turn scope into value.  Whether that converts into pricing power or simply share gains will likely depend on how quickly the engineering organizations produce a genuinely integrated package rather than a bundled catalog.

Positioning in Utility-Scale Solar and Storage

U.S. load growth expectations have risen with data-center development, and utility-scale solar paired with storage remains among the faster routes to new capacity.  Schedule reliability has probably become more valuable to buyers than incremental component savings.  The companies frame the combination as creating the scale to pursue battery storage, data-center infrastructure and other high-growth adjacencies, and that framing is probably the more consequential part of the rationale.

The competitive effect is harder to call.  Both compete in categories where specification is often set project by project, and a larger supplier may meet resistance from customers who prefer to keep sourcing split.  The pro forma figures published by the companies are described as preliminary and indicative, are expressly not projections and are unaudited:  FY2027 revenue of $2.2Bn to $2.4Bn and Adjusted EBITDA of $410.0MM to $480.0MM including expected year-one synergies.  We would treat those ranges as scoping rather than as guidance.

Broader Implications for Energy Infrastructure M&A

All-stock structures tend to appear where both parties see valuation risk and neither wishes to fund a premium in cash.  A fixed exchange ratio leaves both shareholder bases exposed to relative price movement between signing and closing, and in a sector whose equities have moved with policy and rate news, that exposure is not trivial.  The absence of a stated value or premium is consistent with a combination rather than a sale, and it removes an anchor shareholders often use in judging terms.

For the wider sector, the transaction suggests that equipment suppliers may be reaching the same conclusion as their customers:  that scope and integration matter more than category leadership.  We would expect further consolidation among suppliers of racking, electrical balance-of-system, storage enclosures and related equipment, particularly where two product lines sell into the same project through different specifications.  Deleveraging to less than 2.0x, if achieved, would also leave the combined company able to take part in that consolidation as a buyer.

Conclusion

The merger looks like an effort to build one integrated supplier of balance-of-system equipment for utility-scale solar and storage, with ownership following the economics rather than the legal structure.  The cross-sell gap remains the central source of the value on offer.  Execution risk sits mainly in commercial integration rather than in financing:  the consideration is equity, and the leverage path is already modest.  Shareholders on both sides will want to read the joint proxy and S-4 closely, particularly on process and on the assumptions behind the indicative pro forma figures.  Both shareholder bases must approve, so the terms will be tested before the expected first-quarter 2027 closing.

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