STR Holdings To Launch First Solar IPO In 15 Mos

NEW YORK (AP) — STR Holdings Inc. plans to go public this Friday, a move that would launch the first solar initial public offering on a U.S. index in over a year.

The maker of solar module encapsulants and consumer product quality assurance services is looking to raise net proceeds of about $25.4 million. Encapsulants are specialty sheets and film that hold a solar module together and protect the semiconductor circuit.

STR is offering 2.3 million common shares and plans to price shares between $13 and $15 each. Its selling stockholders — which include board member affiliates, executive officers and affiliates of an underwriter — will sell 10 million shares.

Francis Gaskins, president of IPOdesktop, said the offering appears overpriced, given its plunging net income, hefty amounts of debt and rising interest expense as a percent of operating income.

"There's a hint of desperation in the IPO," said Gaskins, noting that STR's IPO seems "driven by shareholders saying 'Get me out of this deal.' They want to bail."

The largest selling stockholder still plans to hold a stake in the company. With this offering, DLJ Merchant Banking Partners IV LP and its affiliated funds will reduce its share ownership from 51.1 percent of shares to between 32.9 percent and 35.3 percent, depending on whether the underwriters buy more shares.