Top leaders from Gibraltar Industries and TerraSmart detail plans to become a “one-stop shop” in the solar development value chain.
“The solar coaster is going up,” said Bill Vietas, president of the renewable energy group at Gibraltar Industries. With the company’s latest acquisitions, Gibraltar plans to enjoy the ride.
In early January, New York-based Gibraltar acquired both solar racking company TerraSmart and software provider Sunfig in separate deals totaling nearly $225 million.
Vietas and Ryan Reid, president of TerraSmart, spoke with pv magazine USA to discuss the recent acquisitions and offer insights into the U.S. market.
Family expansion
Gibraltar first entered the solar space in 2015 when it acquired RBI Solar, a mounting solutions provider for commercial, utility-scale, and carport solar projects. Gibraltar grew its portfolio in 2018 with SolarBOS, an electrical balance-of-systems company.
Bill Vietas
Now, Gibraltar has welcomed TerraSmart and Sunfig to what Vietas called its “renewables family.” He said Gibraltar chose the two companies because of previous teamwork, shared cultures, and their technologies.
Gibraltar bought Sunfig earlier this year in a deal worth $3.75 million. The software firm’s solutions help optimize solar energy investments through upstream design, performance, and financial modeling to meet customers’ needs at different stages of project development.
In the larger of the two acquisitions, Gibraltar paid $220 million for TerraSmart, which provides screw-based, ground-mount solar racking technology. Reid joked that his company’s price tag wasn’t expensive, but “good value.” Vietas agreed.
Both Sunfig and TerraSmart are slated to become product brands under the Gibraltar umbrella, with all current employees joining the team. “There’s a lot of opportunity for us hiring, as well as people growing within the company and taking on more roles,” Reid said. “The idea is expansion.”
Reid said he saw this deal as an opportunity to boost TerraSmart’s products, integrated services, and innovation.
Similarly, Gibraltar viewed these acquisitions as a way to expand its footprint in the U.S. market and become an end-to-end, turnkey provider of ground-mount infrastructure, tracker tech, and design software.
“Putting that all together and having a good one-stop shop for customers to go to is really important to us,” said Vietas.
Bad dirt
Gibraltar already offered ground-mount racking solutions. However, Vietas said TerraSmart’s ground-screw technology was designed for tough soil and hilly terrain, which are a challenge for developers.
According to Reid, solar developers sometimes run into “land refusal” when trying to install ground-mount systems, leading to delays, pile deformations, or other issues. He said TerraSmart’s ground-screw technology can help eliminate such problems and open project development for more difficult sites.
As the name suggests, the ground-screw solution has a spiral thread, which is designed to help minimize embedment depth and make it easier to install. The product’s forged tip helps pinpoint the screw for accuracy and ensure foundation plumbness.
“Years into this renewables revolution, a lot of ‘the good dirt,’ as we call it, may have been picked over,” Reid said. “You’re seeing more and more sites that are encountering issues.”
Examples of so-called “bad dirt,” which some developers might typically avoid, include undesirable farmland, rocky spots in the Northeast, areas along the Appalachian Mountains, and volcanic or other hard soils in the West.
Reid and Vietas suggested that developing projects on sites with bad dirt will only lead to more solar, overall.
Nonetheless, there is still good dirt out there waiting to host projects.
Reid said that the fact that Gibraltar is a larger, end-to-end organization with different design software, technologies, and resources will allow the company to “truly take an agnostic view of any site” and choose the best solution for a customer.
Company expectations
With Gibraltar’s two latest acquisitions complete, Vietas said it’s an “exciting time” and that Gibraltar plans to keep learning and growing in the U.S. solar market. That includes organic growth through in-house improvements, as well as longer-term inorganic growth through other potential acquisitions.
“There’s certainly lots to do and lots of opportunity out there,” said Vietas. He said that Gibraltar is focused more on meeting customer demands and offering value, rather than on meeting any “specific number of acquisitions.”
As for whether the industry should expect new product announcements anytime soon, Reid declined to answer and quipped, “We don’t want to give too much away just yet.”
The partners did say they plan to place major attention on the growing utility-scale solar tracker market, a familiar space for TerraSmart.
Over the past 10 years, TerraSmart has helped build more than 3 GW of ground-mounted, utility-scale solar projects across the U.S. In addition to fixed-tilt racking, the company’s current products include the single-axis tracker under the TerraTrak brand.
“We’ll continue to have relevant solutions that make an impact to our clients’ bottom line and bring a different business model and level of experience that very few others have,” said Reid. “We feel that’s the growth strategy that will prevail.”
With these deals, Gibraltar said it expects its solar energy platform within its Renewable Energy and Conservation segment to pass $700 million in organic revenue by 2025 from a pro forma fiscal 2020 revenue base of around $400 million.
Market outlook
Vietas and Reid were both optimistic about the U.S. solar industry and expressed little concern for unforeseen challenges, whether financial or political.
“It’s a large market, and renewables are here to stay,” said Vietas. “Ten years ago, it was so up and down. Of course, nothing is going to be exactly straight, linear, and perfect. You’ll have the solar coaster–that’s not going to go away. But the solar coaster is going up.”
Even after a contentious U.S. election and enduring political divides across the country, Reid said, “No matter what side of the aisle you’re on, there’s been a lot of interest to continue the renewable path that’s been forged over the past decade. We don’t really see too many disruptions ahead.”
Gibraltar and TerraSmart are among many U.S. solar companies that have joined forces over the years. Vietas said such mergers and acquisitions are a positive sign.
“I think it signals a healthy, growing market,” he said. “It also signals the fact that more investment wants to come into renewables. You could look at it as consolidation, I suppose, but I look at it as being able to provide value to customers at a deeper level.”
