SunEdison, TerraForm Reveal They Are Buying Vivint Solar

SunEdison Inc SUNE, Vivint Solar Inc VSLR and TerraForm Power Inc TERP announced a deal on Monday morning for SunEdison to acquire Vivint Solar for about $2.2 billion in cash, shares of SunEdison common stock and SunEdison convertible notes. As part of the deal, TerraForm has entered into a definitive purchase agreement to acquire Vivint Solar’s 523 megawatt rooftop solar portfolio for $922 million in cash upon completion of the Vivint/SunEdison deal.

Terms
When the deal is executed, Vivint Solar shareholders will receive $16.50 per share, consisting of $9.89 per share in cash, $3.31 per share in SunEdison stock and $3.30 per share in SunEdison convertible notes. SunEdison expects to issue about $370 million in common stock and $350 million in convertible notes to Vivint Solar shareholders.

Management speaks
All of the parties involved in the deal spoke positively of the transaction in Monday’s press release. “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,” SunEdison CEO Ahmad Chatila said of the deal.

Vivint Solar CEO Greg Butterfield added that Vivint shareholders should feel good about the terms of the deal. “This transaction with SunEdison delivers to Vivint Solar’s stockholders excellent value for the business we have built over the last four years,” he explained.

The Vivint Solar management team will be joining SunEdison and SunEdison’s residential and small commercial (RSC) business unit will be merging with the Vivint Solar team.

Guidance
In addition to news of the deal, SunEdison announced 2016 guidance of 4,200 MW to 4,500 MW. TerraForm Power also raised prior 2016 dividend per share guidance from $1.70 to $1.75 and initiated 2017 dividend per share guidance of $2.05.