Sunrun (NASDAQ:RUN), the nation's leading residential solar supplier, announced it is acquiring rival Vivint Solar (NYSE: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 (NASDAQ:TSLA), 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.
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."