Nextpower NASDAQ: NXT said it has entered into a definitive agreement to acquire Prevalon Energy, a utility-scale battery energy storage systems provider, in a transaction the company said would expand its platform beyond solar into storage, controls, software and lifecycle services.
Founder and CEO Dan Shugar said on an investor call that the acquisition would put Nextpower “immediately in the BESS and AI data center power supply business” through Prevalon’s technology, backlog and team. The deal remains subject to customary closing conditions, including regulatory approvals.
Deal Terms and Updated Outlook
Chief Financial Officer Chuck Boynton said Nextpower will acquire Prevalon for total consideration of up to $365 million. That includes approximately $150 million in initial cash consideration, $50 million of Nextpower stock and up to $165 million of contingent cash consideration tied to profit targets over four years.
Boynton said the transaction is expected to close near the end of Nextpower’s fiscal first quarter, subject to antitrust review and other customary conditions. He also said Nextpower expects the transaction to close with more than $75 million of cash and cash equivalents.
In connection with the acquisition, Nextpower plans to make inducement grants under a management incentive plan, including performance stock units to Prevalon’s owner-managers valued at up to $100 million, with vesting tied to four years of cumulative Prevalon profit. The company also plans up to $35 million in restricted stock units for existing and new employees.
Nextpower updated its fiscal 2027 outlook to reflect the anticipated contribution from Prevalon after closing. Subject to completion of the deal, the company now expects:
- Fiscal 2027 revenue of approximately $4.0 billion to $4.4 billion, up from a prior outlook of $3.8 billion to $4.1 billion.
- Fiscal 2027 adjusted EBITDA of $845 million to $930 million, compared with a prior outlook of $825 million to $900 million.
Boynton said the updated outlook reflects the expected revenue and profit contribution from Prevalon after the anticipated closing date, along with the timing of contracted project activity and customer deployment schedules. He said Prevalon’s backlog at closing is expected to be “significantly above $300 million.”
Strategic Expansion Into Storage and AI Data Centers
Shugar said the transaction is intended to extend Nextpower’s solar technology platform into large-scale battery energy storage systems, power controls, energy management software and lifecycle services. He said customers are operating in a power environment shaped by rising electricity demand from AI, data centers, electrification, industrial growth and grid modernization.
Nextpower projects global demand for battery energy storage systems outside China could represent an opportunity of up to $35 billion in 2030, including nearly $15 billion in the U.S., Shugar said.
Prevalon has more than 6 GWh deployed and contracted globally, with customers across utilities, independent power producers, developers and AI data centers, according to Shugar. Its platform includes integrated battery storage, power electronics, controls, energy management software and lifecycle services supported by long-term service agreements.
Shugar highlighted Prevalon’s insightOS operating system and Hybrid Power Stabilizer as key parts of the acquisition rationale. He said the Hybrid Power Stabilizer addresses rapid AI-driven load swings by providing active power control, stabilizing voltage and frequency and supporting continuous operations in grid-connected, hybrid and standalone environments. He said the technology is already supporting 1.3 GW of hyperscaler power infrastructure applications.
“For mission critical facilities, power quality and uptime are not simply cost issues,” Shugar said. “They’re operating imperatives.”
Margins, Backlog and Integration Plans
Boynton said Prevalon operates a lean model with operating expenses in the mid-single digits. He said Nextpower expects Prevalon operating margins this year in the low double-digit range, with an opportunity to expand to the mid-teens or higher over time as data center activity scales and lifecycle services, supply chain discipline and execution efficiency contribute to mix and margin improvement.
Boynton said Nextpower is not assuming that value creation depends on large, unproven cost synergies. Instead, he said the strategic rationale is centered on broadening customer offerings, expanding the company’s addressable market and leveraging Prevalon’s storage and controls capabilities across Nextpower’s customer relationships, engineering platform, supply chain discipline and execution model.
Nextpower plans to operate Prevalon as a wholly owned subsidiary after closing, Shugar said during the question-and-answer session. He said Prevalon brings some customers that overlap with Nextpower’s existing base, while also adding relationships with utilities, hyperscalers and battery storage developers.
Boynton said the company’s integration priorities will include customer continuity and project execution, retaining Prevalon’s technical and operational talent and bringing combined capabilities to customers in solar-plus-storage, AI data center power infrastructure and standalone BESS deployments.
Analyst Questions Focus on Supply Chain and Customers
In response to a question from Moses Sutton of BNP Paribas about supply chain optimization, Shugar said Nextpower has supply chain staff across 13 global offices and believes it can help Prevalon with sourcing, longer-term procurement, buying power and supplier relationships. He said Prevalon is positioned to support varying customer needs for domestic content.
Asked by Praneeth Satish of Wells Fargo about the updated guidance, Boynton said Nextpower’s outlook assumes roughly three quarters of contribution from Prevalon. He said the fiscal year is covered by backlog, though timing could vary.
Brian Lee of Goldman Sachs asked about recurring revenue and hyperscaler exposure. Boynton said Prevalon has a recurring revenue element through long-term service agreements, while Shugar said Prevalon is currently fulfilling a Tier 1 hyperscaler AI data center project. Shugar said Prevalon’s backlog is measured under the same standard as Nextpower’s, meaning fully executed legal agreements with deposits and liquidated damages provisions.
Shugar also told analysts that Nextpower will not lose focus on its core solar business. He said solar remains central to the company’s strategy, while the acquisition would add storage, controls, software and lifecycle services around that core platform.
About Nextpower NASDAQ: NXT
Nextpower, formerly known as Nextracker, is traded on NASDAQ under the symbol NXT and is a leading provider of advanced solar tracking solutions for utility-scale and distributed energy projects. The company specializes in the design, engineering and manufacturing of single-axis tracker systems that optimize the capture of solar energy by following the sun’s trajectory throughout the day. Nextpower’s core hardware offerings aim to enhance energy yield, reduce balance-of-system costs and simplify installation and maintenance for downstream solar developers and operators.
In addition to its tracker hardware, Nextpower provides a suite of digital software and analytics tools to maximize asset performance.
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