The $2.2 Billion Deal – SunEdison To Acquire Vivint Solar

SunEdison - Terraform Power - Vivint Solar

SunEdison, Inc. (NYSE: SUNE) and TerraForm Power (NASDAQ: TERP) have announced an agreement for the acquisition of Vivint Solar for USD $2.2 billion (~AUD $2.98 billion at current exchange rates).

SunEdison has also entered into a definitive purchase agreement with a subsidiary of  its yieldco, TerraForm Power, which will acquire Vivint Solar’s rooftop solar portfolio consisting of the 523 megawatts PV capacity expected to be installed by the end of this year.

Additionally, TerraForm Power will acquire future completed residential and small commercial projects from SunEdison’s expanded residential and small commercial (RSC) business unit.

SunEdison’s existing RSC development business and the Vivint Solar team will be merged.

“The rooftop solar portfolio is expected to add a growing, high-quality, long-term contracted and geographically diverse asset base to the SunEdison family of companies, strengthening one of the largest and highest-growth global renewable power platforms in the world,” says part of a SunEdison statement regarding the deal.

One of the USA’s leading providers of distributed solar solutions, Vivint Solar owns, installs, and maintains solar panels on its customers’ homes. Customers invest little to no money up-front; instead just paying for the electricity that the panels produce at a cheaper rate  than mains grid supplied power. It’s a similar approach to that used in SunEdison Australia’s recently launched SunEdison Energy Plan product.

“SunEdison’s acquisition of Vivint Solar is a logical next step in the transformation of our platform after the successful execution of our First Wind acquisition in January 2015,” said Ahmad Chatila, SunEdison chief executive officer and TerraForm Power chairman. ” As of the fourth quarter of 2015, our organic growth and recent acquisitions will put SunEdison on track to deploy more than 1 gigawatt per quarter.”

Under the merger agreement, which is subject to the usual approvals, Vivint Solar stockholders will receive USD $16.50 per share, consisting of $9.89 per share in cash, $3.31 per share in SunEdison stock, and $3.30 per share in SunEdison convertible notes.

SunEdison also announced revised 2016 annual guidance of 4,200 MW to 4,500 MW, a 50 percent jump from its previous forecast of 2,800 MW to 3,000 MW.

July has been another busy month for the world’s largest renewable energy developer and its yieldco. Also yesterday, SunEdison announced its wholly owned subsidiary, TerraForm Global, Inc., intends to commence an initial public offering of its Class A common stock today.

Last week, SunEdison and Advanced Microgrid Solutions (AMS) inked a joint venture to finance and deliver 50 megawatts of energy storage for Southern California Edison (SCE).

Earlier in July, SunEdison stated TerraForm Power had signed an agreement to acquire net ownership of 930 megawatts of wind farms from Invenergy Wind LLC in a deal worth more that USD $2 billion.

Also this month, SunEdison announced the signing of an MoU with Gamesa for the development of up to 1 gigawatt of wind farms and the company also commenced construction of the 185MW Bingham Wind project in Maine, USA.

Further details regarding the Vivint Solar acquisition can be viewed here.

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