An equity announcement has significantly impacted Shoals Technologies Group, Inc. (NASDAQ: SHLS), resulting in a notable rise in the company's stock price during the current-market session. As of the latest update, SHLS shares surged by 5.65%, reaching $7.20 on the US stock charts. This increase followed the company's announcement regarding a significant share repurchase program.
Table of Contents
Toggle- Shares Repurchase Approval
- Agreement For Accelerated Share Repurchase
Shares Repurchase Approval
The buyback of up to $150 million worth of Shoals Technologies' Class A ordinary shares has been approved. Repurchases may proceed via a variety of avenues with this permission, such as accelerated share repurchases, open market transactions, private placements, and other legal procedures.
The company will most likely use its available cash, free cash flow, and credit facility borrowings to fund the repurchase program. Through the implementation of this repurchase program, Shoals Technologies hopes to demonstrate to its board and investors that it has faith in the company's long-term growth potential and business prospects.
Agreement For Accelerated Share Repurchase
Shoals Technologies engaged signed an Accelerated Share acquire (ASR) arrangement with Jefferies LLC to acquire $25 million of the company's Class A ordinary shares in accordance with the share buyback authority. Based on the closing price of $6.81 per share on June 10, 2024, Shoals Technologies will initially receive around 2,202,643 shares of Class A common stock, or about 60% of the ASR's notional value, as per the ASR rules.
During the ASR time, Shoals' Class A common stock price will be modified for a pre-agreed discount and other parameters, and the daily volume-weighted average price will determine the ultimate number of shares repurchased under the ASR. By the third quarter of 2024, the ASR is expected to be completed but Shoals technology is exploring many options with its cash flow, including as strategic acquisitions, debt reduction, share repurchasing, and investments in innovative technology. A bigger portion of the company's wealth generation strategy includes this repurchase program.