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Generac (GNRC) Bolsters Energy Portfolio With Ageto Buyout

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Generac Holdings Inc (GNRC - Free Report) recently announced the acquisition of Ageto. The buyout, which was officially settled on Aug 1, 2024, is likely to boost Generac’s position in the commercial & industrial (C&I) market.

Ageto is known for its cutting-edge microgrid controllers, which are specifically engineered to optimize the performance of various energy resources, including renewable energy sources and electric vehicle chargers. These controllers empower users to coordinate, optimize and supervise all microgrid components from a single, user-friendly interface. 

Generac has been collaborating with Ageto since 2021 by incorporating the latter’s microgrid controllers into its Battery Energy Storage Systems (BESS) and generator sets. By integrating Ageto’s advanced microgrid controller and software with Generac’s BESS and multi-asset systems, Generac aims to provide enhanced site-level system integration and control. Also, this approach offers an edge over hardware-only solutions.

The integration of Ageto’s top-tier microgrid controllers into Generac's offerings is set to streamline asset integration, control and optimization, thus creating a competitive advantage in the rapidly evolving energy landscape.

In June 2024, Generac strengthened its position in the acquisition front with the buyout of PowerPlay Battery Energy Storage Systems, a division of SunGrid Solutions Inc. PowerPlay is one of the leading providers of turnkey BESS solutions specifically built for C&I initiatives up to 7 MWh. The acquisition is likely to bolster Generac's ability to offer an end-to-end suite of products and solutions to its C&I customers, empowering them to achieve their energy goals.

Headquartered in Waukesha, WI, Generac is one of the leading manufacturers of backup and prime power generation systems for residential and business applications, as well as energy monitoring and management devices and services, along with other power products.

Over the years, Generac has continued to expand its offerings with more powerful and durable energy solutions. In July 2024, Generac was awarded a $200 million grant deal from the U.S. Department of Energy to modernize Puerto Rico's energy infrastructure as part of the $1 billion Puerto Rico Energy Resilience Fund.

In the same month, it augmented its energy management solutions portfolio with the addition of a cutting-edge electric vehicle charger. The level 2 charger (available in two formats, the 40A Plus and 48A Plus models) is built with Wi-Fi and Bluetooth connectivity for an enhanced user experience, having charging speeds eight times faster than an L1 charger.

In the last reported quarter, Generac reported revenues of $998 million compared with $1 billion in the prior-year quarter. The figure also missed the consensus estimate by 0.5%. Strength in Residential product sales was offset by a slowdown in the C&I product sales. However, due to a surge in power outage activity in recent times, including the impact of Hurricane Beryl, Generac has updated its revenue guidance for 2024. It now expects revenues to increase 4-8% compared with the previous outlook of 3-7% rise.

At present, GNRC carries a Zacks Rank #2 (Buy). The stock has gained 28.6% in the past year compared with the industry’s growth of 3.4%.

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