Enphase Energy Inc. (Nasdaq: ENPH), a Petaluma-based maker of solar microinverters and power-storage systems, today announced a cash-and-stock deal to acquire the microinverter business of SunPower (Nasdaq: SPWR).

The deal involves $25 million in cash and 7.5 million shares of Enphase common stock. Enphase would place its IQ microinverters in SunPower’s Equinox Home Solar System. Enphase expects to add $60 million to $70 million in annualized revenue in the second half of 2019 at 33 percent to 35 percent gross margin with the acquisition, as well as acquiring over 140 patents, according to Enphase's announcement.

The transaction is expected to close by end of the third quarter, with initial IQ shipments in the fourth quarter. The $25 million in cash would be funded from Enphase’s balance sheet in two installments.

“We are pleased to become the microinverter supplier for SunPower’s AC Modules,” said Badri Kothandaraman, president and CEO of Enphase Energy, in the announcement. “The IQ 7XS 320W AC microinverter in an ACM strongly complements SunPower’s high efficiency solar cells, communication and racking to create a high performance, high quality and easy-to-use Equinox Home Solar System, providing exceptional value to homeowners, dealers and architects.”

Tom Werner, CEO of Silicon Valley-based SunPower, said co-development on Equinox microinverters will lead to “containing costs, leveraging R&D support and helping streamline our business priorities,” according to the announcement.

Both companies have focused on the solar business on a world stage.

Last month, Kothandaraman said its latest inverter, IQ7, was rolled out in a limited way.

“In Q2, we expect to continue the ramp and introduce IQ 7 in rest of the world," he said. "Note that the rest of the world is directly transitioning from the fifth-generation product to the seventh-generation product.”

He also previewed the coming eighth generation of the microinverter.

“So basically, IQ 8 is based upon a brand new technology, called as Ensemble, which was invented here at Enphase,” he said.

It would be introduced in “off-grid markets first,” Kothandaraman said.

“In the off-grid market, the obvious places for us to attack are to go and gain market share in, would be Africa and India. Africa is no-grid market, while India is weak-grid market. So those are the places where we will begin,” he said.

The ending cash balance as of March 31 was $53.3 million, up from $29.1 million at year-end, the company reported.

Earlier this month, the Petaluma company announced the selection of a new chief financial officer. Eric Branderiz took over June 4 as vice president and financial chief from Bert Garcia. In addition to serving as vice president, corporate controller and chief accounting officer at Tesla, Inc., in Fremont, Branderiz was senior vice president, corporate controller and chief accounting officer at SunPower.