STR Holdings Inc. of East Windsor on Tuesday said it has an agreement to sell a majority of the company to a solar-power business in China, Zhenfa Energy Group Co.

Zhenfa will buy a 51 percent interest in STR for $21.7 million. The proceeds and other cash on hand will be distributed to STR stockholders in a special divided with an aggregate value of $22.6 million.

The goal of selling a majority share of the company to Zhenfa is to drive STR's sales of photovoltaic encapsulants — materials used in solar panels — to solar module manufacturers in China. The agreement is subject to approval by regulators and STR stockholders.

"We look forward to presenting this unique strategic transaction to our stockholders for approval," STR Chief Financial Officer Joseph C. Radziewicz said in a statement. "Through this transaction, our existing stockholders will receive an immediate significant return of capital via an $0.85 per share special cash dividend, while still owning 49% of what we believe will be a leading global encapsulant provider with a strong presence in China."

The transaction prices STR shares at $1.60, which is a 23 percent premium on the average closing stock price of $1.30 for a 10-day period ending Aug. 8.

STR's global director of sales and technology, Luke A. Strzegowski, said in a statement: "We expect to benefit greatly from Zhenfa's longstanding presence, key position as a major purchaser of solar panels and well-respected reputation in the region. We look forward to growing our sales in China with their support."

STR Holdings has a market cap of $39.3 million, which is the company's total worth. It spent $26 million in the first six months of the year to repurchase common stock, though the stock price fell 14 percent during that time as the S&P 500 Index increased by 7.1 percent.

In early 2013, STR Holdings lost its main customer, First Solar, which moved to a new supplier. The business was worth $39 million in sales in 2012 for STR.