Clean energy provider SolarCity (NASDAQ: SCTY ) is buying the assets of Paramount Energy Solutions, the company behind the brand Paramount Solar, for approximately $120 million in cash and stock, the companies announced today.
Under the terms of the arrangement, SolarCity will acquire the business of Paramount Solar for $116.3 million worth of stock, with the remainder in cash. Paramount Energy Solutions is a subsidiary of Paramount Equity.
Paramount Equity CEO Hayes Barnard will now serve as SolarCity's chief revenue officer. Paramount Solar is majority-owned by marketing company Guthy-Renker, and as a result of the new acquisition, Guthy-Renker CEO Ben Van de Bunt is expected to join SolarCity's board of directors.
SolarCity CEO Lyndon Rive was quoted in the company press release as saying, "Hayes Barnard and Guthy-Renker have built what I strongly believe to be the best virtual sales organization in the solar industry, with an extraordinary ability to acquire customers at a low cost. We expect the addition of Hayes, Ben, and the Paramount Solar team to help us attain our goal to reach one million customers in the next five years at an even lower cost than was previously possible."
The company expects the merger to have a greater impact during 2014, but has updated its guidance for 2013 to 278 MW to account for the expected backlog of uninstalled customers.
SolarCity Corp., based in San Mateo, Calif., leases and installs solar energy systems for homes and businesses. The company installs solar panels on customer roofs for no upfront cost. Customers agree to pay a set price for the electricity generated by the panels, usually over 20 years.
The company says approximately one in five new residential solar customers chooses SolarCity. Since the start of 2013, the company has seen its stock price rise from $12.33 to $37.92 per share as of today's close, a remarkable 207% increase. The acquisition is expected to close in September.
-- Material from The Associated Press was used in this report.