Please ensure Javascript is enabled for purposes of website accessibility

Sunrun Consolidates the Residential Solar Market With Vivint Solar Acquisition

By Howard Smith - Updated Jul 7, 2020 at 10:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The nation's leading residential solar panel installer grows its lead over Tesla.

Sunrun (RUN -0.10%), the nation's leading residential solar supplier, announced it is acquiring rival Vivint Solar (VSLR) for $3.2 billion, including debt, in an all-stock deal. Sunrun says the deal will provide $90 million in annual cost synergies, and the combined company would have almost 500,000 customers. 

The move will expand Sunrun's lead over Tesla (TSLA -2.46%), which has been working to grow its Solar Roof and energy storage product offerings. Tesla reported $173 million in energy generation and storage sales in the first quarter of 2020, not including its leasing business. Combined first-quarter sales for Sunrun and Vivint totaled slightly over $300 million. 

solar panels on home roof

Image source: Getty Images.

The deal will give Vivint shareholders 0.55 shares of Sunrun common stock for each share they own, resulting in approximately 36% ownership in the newly combined company. This represents a 10% premium for Vivint shareholders based on Monday's closing share price. Sunrun shareholders will own the remaining 64%. Not including debt, the transaction price equates to approximately $1.46 billion, according to CNBC. 

David Bywater, CEO of Vivint Solar, said the deal will benefit all stakeholders, including customers. "Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernization," Bywater said. 

Sunrun CEO Lynn Jurich added, "Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries." 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vivint Solar, Inc. Stock Quote
Vivint Solar, Inc.
VSLR
Sunrun Inc. Stock Quote
Sunrun Inc.
RUN
$34.10 (-0.10%) $0.04
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$849.87 (-2.46%) $-21.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
379%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.