So what: SunEdison is paying $2.2 billion in total, including repaying $263 million in debt, for Vivint Solar and will expand its already massive footprint in renewable energy. Concurrent with the acquisition, 523 MW of solar installations will be dropped down to TerraForm Power, SunEdison's yieldco, for $922 million.
Vivint Solar shareholders will receive $16.50 per share in the buyout, which will consist of $9.89 in cash, $3.31 in SunEdison stock, and $3.30 in convertible notes in SunEdison. It's that last piece that may be the reason shares are trading well below the $16.50 per share buyout price.
Now what: Vivint Solar never gained a lot of traction on public markets despite its growth in residential solar. So, management saw the SunEdison acquisition as a way to expand their footprint, stabilize the business, and get a nice return in the meantime. For Vivint Solar shareholders, I don't see a lot of upside to holding on to shares much longer, and SunEdison may not provide the same industry exposure or value as Vivint Solar did.
For SunEdison, the acquisition is another bold expansion, but it will add even more debt to the company. Management will have to prove that it isn't overpaying for all of these development assets, because the company is on a massive buying spree but still isn't profitable or generating operating cash flow right now.