SunEdison to buy Vivint Solar for about $2.2 bn

SunEdison Inc, a former business unit of Monsanto Company, yesterday struck a deal to buy Vivint Solar Inc in a deal valued at about $2.2 billion,

Under the deal, SunEdison is offering Vivint stockholders $9.89 in cash, $3.31 in stock and $3.30 in notes for every share. The offer works out to $16.50 per share, a 51.7-per cent premium to Vivint's Friday close.

As part of the proposed acquisition, SunEdison has entered into a definitive purchase agreement with a subsidiary of TerraForm Power to acquire  Vivint Solar's rooftop solar portfolio, consisting of 523 megawatts (MW) expected to be installed by year-end 2015, for $922 million in cash. 

In addition, TerraForm Power will acquire future completed residential and small commercial projects from SunEdison's expanded residential and small commercial business unit. 

SunEdison intends to fund the cash portion of the merger from the proceeds of a new $500 million secured debt facility and the completion of the $922 million sale of assets to TerraForm Power. 

Vivint Solar, controlled by private equity firm Blackstone Group, is a provider of distributed solar energy – electricity generated by a solar energy system installed at a customer's location – to residential, commercial and industrial customers in the US.

Vivint Solar, the second-biggest solar panel installer in the US, is a solar electricity provider that designs, installs, and maintains residential photovoltaic system.

The Utah-based company owns, installs, and maintains solar panels on customers' roofs in exchange for customers agreeing to purchase the solar energy their panels produce. Customers do not pay for installation, but pay for energy that the panels produce at lower rates than those charged by electric utility providers.

"SunEdison's acquisition of Vivint Solar is a logical next step in the transformation of our platform after the successful execution of our First Wind acquisition in January 2015," said Ahmad Chatila, SunEdison CEO and TerraForm Power chairman.

"This transaction with SunEdison delivers to Vivint Solar's stockholders excellent value for the business we have built over the last four years," said Greg Butterfield, Vivint Solar's CEO. "SunEdison and TerraForm Power have built a unique model that recognizes the value of long-term, predictable, contracted cash flows from our residential solar portfolio while providing access to a broad pool of financing at an attractive cost of capital."