SunEdison, a clean energy firm, disclosed Monday that it has made arrangements to obtain the second largest company in the U.S., Vivint Solar, that puts up solar panels on residential and commercial rooftops. The planned $2.2 billion deal combines cash and shares of convertible notes and common stock of SunEdison as payment.
The announcement from SunEdison mobilized Vivint Solar's stock up by over 40 percent in the morning trading. Vivint Solar has installed and financed over 40,000 solar panels as of the first quarter of 2015.
TerraForm Power, a subsidiary of SunEdison and a yieldco, which is a publicly-traded firm that clusters together the resources of clean energy projects basing on the predictable and long term income coming from the reoccuring energy fees, will be the one responsible for procuring the existing solar projects of Vivint Solar, both the ones already fabricated and future undertakings in development.
Currently, SunEdison has obtained projects in India that involve wind energy through First Wind, a developer of wind farms in the U.S. and also considered as one of the largest. This latest strategy of SunEdison aims to expand aggressively across the industry of clean energy and gives importance and focus to the rapidly thriving market for the roofing system by way of solar panels, as per Fortune.
Ahmad Chatila, SunEdison Chief Executive Officer said, "They're giving us huge bandwidth to expand in the U.S. This gives us unabated growth for 20 years."
SunEdison is based in Maryland Heights, Missouri and has developed itself mostly due to utility scale as well as solar deals that are largely industrial.
According to Bloomberg Business, a Blackstone Group LP affiliate controls Vivint Solar after its first public offering in 2014 and puts up rooftop units for businesses and homeowners. The solar market is booming as the price of panels goes down and has been monopolized by Elon Musk backed SolarCity Corp.
A report from SF Gate revealed that CEO Greg Butterfield, one of Vivint's executives, will now affiliate with SunEdison.
On Monday, Butterfield said, "This is the best cultural fit and best strategic opportunity I've ever seen."
In the end, SunEdison's method of acquiring other companies validates their vision of dominating the flourishing solar industry.
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