Dive Brief:
- SunEdison, the world’s biggest utility-scale renewables developer, will buy Vivint Solar, the second biggest U.S. residential solar developer, for $2.2 billion in cash, stock, notes, and debt. The purchase brings SunEdsion in near the top of the residential market and gives it one of the solar industry’s most effective customer acquisition operations.
- Vivint’s 523 MW portfolio, expected to be installed by the end of 2015, will be transferred to Terraform Power, SunEdison’s yieldco, for $922 million. It will give the yieldco $81 million in average annual available cash and an annual cash-on-cash yield of 9.5% for ten years.
- At the purchase, SunEdison increased its 2016 capacity guidance 50% from between 2,800 MW and 3,000 MW to between 4,200 MW to 4,500 MW. Vivint Solar stockholders get $16.50 per share.
Dive Insight:
The addition of Vivint Solar’s strong customer acquisition capability is expected to make the vertically integrated renewables developer, which manufactures its own solar product from silicon manufacturing to final module, competitive with installation sector leaders SolarCity and Sunrun.
Solar industry financial analysts suggest the deal adds momentum to rumors of a buyout of SolarCity, the leading U.S. rooftop installer, and to the effort of Sunrun to go public.
SunEdison acquired renewables battery storage supplier Solar Grid Storage (SGS) in March. Although the SGS business model was based on using its advanced inverter technology to sell utility-scale projects’ stored power into frequency regulation markets, SGS CEO Tom Leyden told Utility Dive at the time he would be working on a way to aggregate distributed solar and behind-the-meter storage into a marketable commodity with financing through Terraform Power.
SunEdison’s acquisition of First Wind in January gave it a 2015 renewables development portfolio of between 1.6 GW and 2.3 GW and an overall international project pipeline of 8 GW.
