U.S. clean-energy company SunEdison Inc. is expanding its reach across America’s rooftops. The Missouri developer and its spinoff, TerraForm Power Inc., agreed Monday to buy Vivint Solar Inc. for about $2.2 billion in cash, stock and notes.
The acquisition is “a logical next step” in SunEdison’s transformation into a global renewable-energy powerhouse, Ahmad Chatila, SunEdison’s CEO and TerraForm’s chairman, said in a statement. The announcement comes seven months after SunEdison and TerraForm, its power-plant holding company, agreed to buy First Wind Holdings Inc. for $2.4 billion, giving the firms a major stake in the growing wind energy market.
The Vivint Solar deal, which includes debt, grows SunEdison’s foothold in the U.S. residential and commercial solar power business. The U.S. solar market is expanding rapidly amid plummeting solar panel prices -- down more than 80 percent from 2008 -- and diminishing installation and financing costs. Vivint Solar, which operates in seven states, is the second-largest installer of rooftop solar projects, behind SolarCity Corp., whose chairman is Tesla Motors boss Elon Musk.
Under the arrangement, TerraForm will buy Vivint’s rooftop solar portfolio for $922 million. The deal includes 523 megawatts of installed and planned solar projects, which together can produce enough power to light up roughly 76,400 average U.S. households.
Vivint shareholders will receive about $16.50 a share, a 52 percent premium to Vivint’s closing price on Friday.
Shares of Vivint (NYSE:VSLR) were up 46 percent, to $15.92 a share, in early Monday trading. SunEdison (NYSE:SUNE) saw shares rise nearly 5 percent, to $33 a share.
Chatila said the acquisition puts SunEdison on track to install up to 4,500 megawatts of clean energy projects for all of 2016, up 50 percent from its earlier outlook of 3,000 megawatts.
TerraForm was created by SunEdison as an investment platform that owns and operates renewable energy facilities and produces a predictable cash flow. The holding company has been expanding its portfolio through acquisitions. Along with the First Wind deal in January, TerraForm earlier this month agreed to buy a majority stake in a portfolio wind farms from Invenergy Wind LLC, in transactions valued at a combined $2 billion.