Second in size only to SolarCity, the four year old company is likely to be sold to SunEdison for $2.2 billion—which is about four times Vivint’s retained value of $560 million as of March 31, according to a Reuters article.
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When the deal is sealed, SunEdison subsidiary TerraForm will acquire Vivint Solar’s rooftop solar portfolio, consisting of 523 megawatts (MW) expected to be installed by year-end 2015, for $922 million. These projects are expected to provide a 10 year average unlevered cash available for distribution (CAFD) of $81 million, and provide a 10-year average levered cash-on-cash yield of 9.5 percent.
TerraForm Power will also acquire future completed residential and small commercial projects from SunEdison’s expanded residential and small commercial business unit.
“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 inJanuary 2015,” said Ahmad Chatila, SunEdison chief executive officer and TerraForm Power chairman in a press release.
“We expect the Vivint Solar transaction to create significant value for our stockholders through the accretion in our TerraForm Power ownership, the acceleration of our Incentive Distribution Rights and an immediate expansion of our capacity and bandwidth to grow our residential business in the U.S. and globally. 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.”
SunEdison will absorb Vivint management and residential and small commercial development teams, so hopefully that means the company will maintain, if not improve, the same level of service. With soaring interest in solar, this will be key in retaining Vivint’s success.