Sunrun to Buy Vivint in $3.2B Solar Mega-Deal

Sunrun has agreed to receive Vivint Solar for $three.2 billion in a important residential photo voltaic sector consolidation aimed at building economies of scale to reduced shopper acquisition fees.

The all-stock merger of two of the leading three residential photo voltaic businesses solidifies Sunrun’s management of the market. The merged company will have a share of much more than fifteen% while nearest rival Tesla, which obtained onetime chief SolarCity in 2014, has 6%.

Sunrun has focused on funding and setting up photo voltaic panels and batteries while Vivint layouts and installs photo voltaic electrical power techniques for householders.

“This is a transformational opportunity to produce consumer and shareholder price, recognize annual value synergies and deliver cleaner, cost-effective electrical power to much more properties,” Sunrun mentioned in a news release.

The company expects the deal will supply approximated value synergies of $90 million a yr.

“There’s a mandate to keep on to reduced fees,” Sunrun CEO Lynn Jurich mentioned in the course of a conference contact about the deal. “The businesses are so complimentary. So for us this was the proper time to pursue this.”

Residential photo voltaic has attained only three% penetration in U.S. but as Forbes stories, the industry’s business model “requires obtaining wide quantities of new clients searching to place photo voltaic on their roof. Installers expend wide methods on sales and promoting groups that, in many conditions, go door-to-door to indicator up new clients.”

With the COVID-19 pandemic producing door-to-door sales problematic, “Sunrun and Vivint get a much larger megaphone from which to market digitally, and the ability to scale up focused in-individual promoting across a range of distribution channels when lockdowns ease,” Forbes mentioned.

The merged company will have a shopper foundation of almost five hundred,000, with much more than three gigawatts of photo voltaic property on the equilibrium sheet.

“Joining forces with Sunrun will enable us to get to a broader set of clients and speed up the pace of clean up electrical power adoption and grid modernization,” Vivint CEO David Bywater mentioned.

Sunrun shares jumped 22.6% to $26.17 in investing Tuesday while Vivint shares soared 38.2% to $fourteen.sixty nine. Under the phrases of the deal, Vivint shareholders will obtain .fifty five shares of Sunrun for each Vivint share.

Lynn Jurich, residential photo voltaic, photo voltaic panels, Sunrun, Tesla, Vivint Solar