ARRAY Technologies and Shoals agree solar equipment merger with $2.4bn revenue ambition

ARRAY Technologies, Inc. (NASDAQ: ARRY) and Shoals Technologies Group, Inc. (NASDAQ: SHLS) have agreed to merge in an all-stock transaction that would combine structural and electrical equipment used in utility-scale solar projects. The companies expect the combined business to generate indicative 2027 revenue of $2.2 billion to $2.4 billion and adjusted EBITDA of $410 million to $480 million, including anticipated first-year synergies. Shoals shareholders would own approximately 65% of the combined company’s basic shares, although ARRAY would remain the legal acquirer and corporate parent. The transaction offers a route towards greater scale and broader customer relationships, but its shareholder value depends on converting projected commercial benefits into cash generation while managing integration and financing obligations.

How does the ARRAY Technologies and Shoals merger change ownership and control?

Under the merger agreement announced on November 4, 2026, Shoals shareholders will receive 1.6931 ARRAY shares for every Shoals share held. The fixed exchange ratio means the value of the consideration fluctuates with ARRAY’s share price until the transaction closes. Based on ARRAY’s November 3 closing price of $4.64, the consideration represented approximately $7.86 per Shoals share, consistent with an equity value of roughly $1.32 billion calculated at announcement.

The ownership structure is unusual because ARRAY would serve as the legal acquirer even though former Shoals shareholders would own the larger portion of the combined business. Shoals investors are expected to hold approximately 65% of basic shares and 64.5% on a fully diluted basis, with existing ARRAY shareholders retaining the balance. This arrangement gives Shoals shareholders greater economic ownership while using ARRAY as the surviving publicly traded corporate parent.

Leadership arrangements also reflect the importance of Shoals within the proposed group. Brandon Moss, chief executive officer of Shoals Technologies Group, would lead the combined company, while ARRAY chief executive officer Kevin Hostetler would become a special adviser. The companies intend to announce a new corporate name and ticker symbol, indicating that management wants to position the merged business beyond the existing identities of the two solar equipment suppliers.

Both boards have approved the transaction through their participating directors, but closing remains subject to shareholder approval, regulatory clearance, Nasdaq listing authorisation and customary conditions. The companies are targeting completion during the first quarter of 2027. Until closing, the businesses remain separate entities, and the announced financial advantages should be treated as anticipated rather than realised.

Why combine solar trackers, electrical systems and battery storage infrastructure?

ARRAY Technologies supplies structural equipment used to support and position solar panels, including trackers, foundations and fixed-tilt mounting systems. Shoals Technologies Group specialises in electrical infrastructure, including wiring, connections, cable management and power delivery equipment. Combining these capabilities would allow the business to offer customers a more integrated package across important components of solar and energy storage projects.

The commercial rationale goes beyond having a larger catalogue. Utility-scale solar developers frequently work with separate suppliers for structural and electrical systems, creating multiple design interfaces, procurement processes and warranty arrangements. A combined supplier could coordinate component design, purchasing and installation support more closely, potentially reducing engineering complexity and installation costs for project developers.

Management’s analysis indicates that only approximately 20% of projects served by the two companies during 2025 and the first nine months of 2026 used products from both suppliers. That finding provides a measurable cross-selling opportunity, although it does not establish that the remaining projects would be commercially suitable for a combined package. Customers may continue purchasing components separately because of pricing, technical preferences, contractual arrangements or supplier diversification requirements.

The merger also extends ARRAY’s ongoing portfolio expansion. ARRAY completed its acquisition of Affordable Wire Management during 2026, adding wire management capabilities and increasing its exposure to battery energy storage and data centre infrastructure. The company has also expanded its foundation and tracker offerings, making the proposed Shoals combination a further step towards supplying a broader range of energy infrastructure components.

For competitors and project developers, the combination could increase pressure to offer integrated solutions rather than individual product categories. However, the competitive advantage would depend on demonstrated reductions in customer project costs, not simply the number of technologies available from one supplier. Independent engineering firms, developers and equipment purchasers will still compare product reliability, delivery commitments and lifetime project economics.

Can the combined company realistically deliver more than $100 million in annual synergies?

ARRAY Technologies and Shoals Technologies Group expect the merger to generate more than $100 million in incremental annual adjusted EBITDA synergies within three years after closing. Management has identified opportunities involving corporate overhead, selling expenses, procurement, operational improvements and additional revenue. The initial commercial plan includes approximately $20 million of year-one run-rate cost synergies and $15 million from cross-selling opportunities.

The distinction between cost savings and commercial synergies is financially important. Reducing overlapping administration or procurement expenses can produce measurable benefits when integration actions are completed. Cross-selling requires additional customer decisions, successful product qualification and actual project deliveries, making the timing and scale of revenue-related synergies more dependent on market demand.

The companies’ preliminary 2027 financial illustration anticipates revenue between $2.2 billion and $2.4 billion and adjusted EBITDA between $410 million and $480 million. At the midpoint, that implies revenue of $2.3 billion and adjusted EBITDA of $445 million, equivalent to an adjusted EBITDA margin of approximately 19.3%. This is a Business News Today calculation using the disclosed indicative figures, not a forecast of realised profitability.

Importantly, the companies have explicitly described these financial ranges as preliminary and indicative rather than formal financial projections relied upon by their boards or advisers. They have not been independently audited or examined, and actual financial performance could differ materially. The estimates therefore provide a framework for assessing the proposed scale of the business rather than a confirmed earnings target.

Investors will need evidence that integration benefits are being achieved without disrupting manufacturing operations, customer relationships or existing product-development programmes. Consolidating technical and commercial teams may also require investment before the full savings become visible. The success of the transaction will depend on whether additional operating profit exceeds these transition costs and translates into sustainable free cash flow.

What do the latest ARRAY and Shoals results reveal about merger execution risks?

The merger was announced alongside third-quarter 2026 financial results that revealed different operating conditions at the two businesses. ARRAY reported quarterly revenue of $330.2 million and adjusted EBITDA of $32.1 million, together with a net loss attributable to common shareholders of $7.9 million. Its executed contracts and awarded orders reached a record $2.6 billion as of September 30, up 42% year over year.

Despite that order-book growth, ARRAY reduced its full-year 2026 revenue guidance to $1.34 billion to $1.40 billion from the previous $1.40 billion to $1.50 billion range. Adjusted EBITDA guidance was lowered to $190 million to $210 million from $210 million to $230 million. Management attributed the revised outlook partly to changes in project delivery timing, illustrating how a strong order pipeline does not necessarily translate into immediate revenue recognition.

Shoals reported stronger quarterly revenue growth, with sales increasing 43.8% to $195.3 million. Adjusted EBITDA reached $39.8 million, compared with $32.2 million in the year-earlier period, while net income increased to $17.9 million. The company also reported backlog and awarded orders of $791.7 million.

However, Shoals’ gross margin declined to 31.9% from 37.0%, reflecting manufacturing transition inefficiencies, product mix and costs associated with quality-related corrective work. This creates a practical integration consideration because the merged group would be combining manufacturing operations while one business is still addressing the financial consequences of a facility transition.

The order pipelines of ARRAY and Shoals provide evidence of customer demand but require careful interpretation. Both companies include awarded orders alongside binding contractual commitments in their reported order metrics, meaning the figures should not be treated as fully guaranteed future revenue. The overlap between customers and projects also means simply adding the two order books does not independently establish incremental demand for the combined company.

How will preferred-share redemptions affect the merged company’s financial flexibility?

A central feature of the transaction is an agreement addressing ARRAY’s outstanding Series A preferred stock. ARRAY has committed to redeem $317.5 million of preferred securities through mandatory payments, including approximately $161.3 million within 90 days after closing. A further $156.3 million is scheduled to be redeemed through subsequent instalments, with payments extending into 2030.

The arrangement is intended to simplify the combined company’s capital structure and reduce preferred-share cash distributions over time. Management estimates that the mandatory redemptions could reduce cash distributions by nearly $100 million across five years. However, redemption payments themselves require cash, creating a capital allocation obligation during the early integration period.

The companies provided an illustrative pro forma balance sheet showing approximately $873.3 million in net debt and $348.7 million in remaining preferred-stock liquidation preference following the initial redemption, using their stated reference assumptions. Management expects the merged business to achieve net debt to adjusted EBITDA of approximately 2.6 times at the end of 2026 and less than two times by the end of 2027. These leverage estimates depend on the underlying transaction assumptions and anticipated earnings performance.

The combined group would therefore need to balance integration spending, preferred-security redemptions, debt reduction and investments in new products. Its anticipated tax benefits, including Shoals’ tax amortisation and net operating losses, could support cash generation, subject to their actual availability and applicable tax treatment.

Why did ARRAY and Shoals shares rise, and what would validate the merger?

ARRAY Technologies shares closed at $5.33 on November 4, 2026, gaining approximately 14.9% during the session. Shoals Technologies Group shares finished at approximately $9.16, an increase of 8.2%. Both stocks had also advanced during preceding sessions, meaning the full multi-day movement should not be attributed exclusively to the merger announcement.

The share-price gains suggest a favourable immediate response to the proposed combination, but the fixed stock exchange ratio creates a continuing valuation relationship between the companies. Investors holding Shoals shares would receive ARRAY shares rather than a fixed cash payment, leaving their eventual transaction consideration exposed to changes in ARRAY’s market valuation.

The merger presents a commercially credible route towards a broader solar infrastructure offering, supported by measurable overlap in the companies’ customer base and a specific cost-reduction programme. Its financial benefits remain dependent on operational integration, project deliveries and cash management during the preferred-stock redemption period. The most decisive near-term milestones will be transaction approvals, publication of detailed merger financial information and evidence that customer cross-selling can generate additional orders without weakening margins.

What should investors know about the ARRAY Technologies and Shoals merger?

• ARRAY Technologies and Shoals Technologies Group have agreed to a stock-for-stock merger expected to close in the first quarter of 2027.
• Shoals shareholders would receive 1.6931 ARRAY shares for each share owned.
• Shoals investors are expected to hold approximately 65% of the combined company’s basic shares.
• Shoals chief executive officer Brandon Moss would lead the merged business.
• The transaction combines solar structural systems with electrical infrastructure and storage-related equipment.
• Management is targeting more than $100 million in annual adjusted EBITDA synergies within three years.
• Preliminary 2027 revenue of $2.2 billion to $2.4 billion represents an indicative financial illustration, not independently verified earnings guidance.
• ARRAY reduced its 2026 revenue and adjusted EBITDA guidance despite reporting a record order book.
• Preferred-share redemptions totalling $317.5 million will create additional cash requirements after closing.
• Successful integration, measurable cross-selling, lower leverage and sustained cash generation will determine whether the merger creates lasting value.