On Wednesday, Vivint Solar announced in an U.S. Securities and Exchange Commission (SEC) filing that the Federal Trade Commission and Department of Justice have completed their review and cleared SunEdison’s acquisition of the company.
Vivint Solar is the second-largest residential solar installer in the United States, with an estimated 11% market share during the first quarter of 2015. GTM Research says this move represents the culmination of SunEdison working for years to establish a larger presence in the residential sector, and that Vivint was a good fit.
"The easiest way to explain this acquisition is that SunEdison is really good at financing, and Vivint is really good at sales," says GTM Research Solar Analyst Nicole Litvak. "SunEdison gains a very large up-front portfolio to put into TerraForm, and a supply of residential projects going forward."
This acquisition also follows SunEdison’s purchase of First Wind, which closed in January 2015 and made the company the world’s largest renewable energy developer. First Wind’s projects also feed TerraForm Power, and Litvak notes the synergies between TerraForm and Vivint.
"The only residential solar so far in a yieldco is coming from companies that both have a yieldco and do residential," explains Litvak. "No one has a yieldco with only residential solar in it no one really has enough to do that."
"It is a pretty decent contribution to TerraForm every quarter. And that allows (Vivint) to focus on what they are good at, which is sales."
The acquisition comes at a rough time for SunEdison and TerraForm Power. Stock of both companies fell after the release of SunEdison’s second quarter results earlier this month, with SunEdison stock losing 1/3 of its value in two days. SunEdison stock is now trading at roughly 40% of the value it had during a peak in late July.