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Sunrun Consolidates the Residential Solar Market With Vivint Solar Acquisition

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

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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.

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Vivint Solar, Inc. Stock Quote
Vivint Solar, Inc.
Sunrun Inc. Stock Quote
Sunrun Inc.
$34.10 (-0.10%) $0.04
Tesla, Inc. Stock Quote
Tesla, Inc.
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