SolarCity Buying Paramount Solar in $120 Million Deal

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.

link


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 14, 2013, at 12:00 PM, ronwiserinvestor wrote:

    Reaching the goal of a million customers will be difficult now that consumers are becoming aware of the availability of $0 down, non collateralized solar loans with interest rates as low as 4.99% along with $0 down FHA, no equity needed solar loans from dealers with substantially lower pricing than Solar City offers. In addition more and more consumers are beginning to discover that it is far more difficult to sell their homes with a solar lease attached to it. Furthermore Solar Home as in .com, a solar system retailer with a well established nationwide customer base has a far lower customer aquisition cost than SolarCity or Paramount as well as substantially lower retail pricing of less than $3.15 a watt before any financial incentives with full system ownership and full incentive retention.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2593697, ~/Articles/ArticleHandler.aspx, 10/20/2014 6:03:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement