M&A

SunEdison to Acquire Solar Panel Firm for $2.2B

SunEdison's bid represents a 51% premium to Vivint Solar's closing price last Friday.
Matthew HellerJuly 21, 2015
SunEdison to Acquire Solar Panel Firm for $2.2B

SunEdison has agreed to acquire Vivint Solar, the second-largest U.S. solar panel installer, in a deal valued at $2.2 billion. The takeover will expand SunEdison’s presence in the booming residential solar market.

SunEdison’s TerraForm Power yieldco will also eventually buy Vivint’s rooftop solar portfolio of 523 megawatts, expected to be installed this year, for $922 million.

“It’s a momentous day, a transformative day for the company,” SunEdison CEO Ahmad Chatila said on a call with analysts. “This deal with Vivint Solar will allow us to be a top player in residential.”

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As Forbes reports, the company has built its solar business largely in the commercial and utility segments, but over the past year has invested heavily in energy storage, wind farms, and even hydropower plants here at home and abroad.

Vivint Solar is just one of a handful of U.S.-based public solar retail service providers and went public only last October. SunEdison’s offer, which was announced Monday, works out to $16.50 per share — a 51.7% premium to Vivint’s Friday close.

The stock closed up a fraction Tuesday at $15.85, while SunEdison finished at $29.38, down about 7%.

SunEdison, which owns a controlling interest in TerraForm Power, is also planning to expand its yieldco model with TerraForm Global. That company, which is preparing to go public, will own and operate power plants outside the U.S., complementing the domestic focus of the first TerraForm, Bloomberg reports.

“A yieldco is a dividend growth-oriented public company, created by a parent company, that bundles renewable and/or conventional long-term contracted operating assets in order to generate predictable cash flows,” according to the National Renewable Energy Laboratory.

TerraForm Global is looking to raise up to $1.19 billion in its initial public offering, according to a regulatory filing.

SunEdison spun off its clean-power assets into TerraForm Power last year, joining other renewable-energy developers that have transferred solar and wind farms, and in some cases other energy projects, to new companies they have set up and taken public.

Earlier this month, TerraForm Power agreed to buy a majority stake in a portfolio of wind farms in the U.S. and Canada from Invenergy Wind LLC in transactions valued at a combined $2 billion.