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SunEdison Acquires Vivint Solar to Enter Residential and Commercial Solar Power Business

Jul 21, 2015 01:05 AM EDT | By Don Gil Carreon
SunEdison, TerraForm Power, solar energy

Solar power company SunEdison Inc announced on Monday a deal to buy Vivint Solar Inc for about $2.2 billion to enter the residential and commercial solar power business.

SunEdison said in a statement that as part of the deal, subsidiary TerraForm Power Inc. will also buy  Vivint Solar's rooftop solar portfolio, consisting of 523 megawatts (MW) expected to be installed by year-end 2015, for $922 million in cash.

The statement added that will acquire future completed residential and small commercial projects from SunEdison's expanded residential and small commercial (RSC) business unit.

SunEdison CEO Ahmad Chatalia said the Vivint Solar acquisition is key in growing the company's capacity  and grow its residential business in the U.S. and around the world.

"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. We expect the Vivint Solar transaction to create significant value for our stockholders.... 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," he said.

Under the deal, Vivint Solar stockholders will receive $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 said it expects to issue approximately $370 million of its common stock and approximately $350 million of SunEdison convertible notes to Vivint Solar stockholders as merger consideration.

Reuters reported that Vivint's shares were up 44 percent in premarket trading on Monday. The report noted that Vivint Solar is the second-biggest installer of rooftop solar panels behind Elon Musk-backed SolarCity Corp.  It operates  in seven states including California and New York. The company went public last October.

Reuters added that falling cost of solar equipment have led to a surge in demand for rooftop solar systems. Earlier this month, the Obama administration unveiled plans to provide access to solar energy to low-income Americans through several initiatives including partnerships with the private sector.

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