Sungevity to Become a Public Company Through a Merger Agreement

Sungevity

Sungevity, Inc., a technology-driven solutions provider, offering in the residential and commercial solar energy industry, and Easterly Acquisition Corp.  announced that they have entered into a definitive merger agreement. This transaction is expected significantly to enhance Sungevity’s competitive position, accelerate its strategic development and cement its long-term growth opportunity.

Pursuant to the transaction, which is subject to customary closing conditions and approval by Easterly and Sungevity stockholders, all of the outstanding equity and convertible debt of Sungevity will be converted into shares of Easterly common stock. Upon completion of the transaction Easterly will change its name to Sungevity Holdings, Inc. and will trade on the NASDAQ stock exchange under the ticker symbol SGVT.

Sungevity’s management team will remain with Sungevity Holdings under the leadership of current Chief Executive Officer and Co-Founder, Andrew Birch. Sungevity Holdings’ board of directors will be composed of members from the current boards of both Easterly and Sungevity.

“We believe the partnership between Sungevity and Easterly will further establish Sungevity as a well-capitalized innovator in its accelerating market,” said Darrell Crate, Chairman of Easterly. “We will provide leverage to the strong management team in building channel partnerships to drive value to the approximately 88,000,000 households that are forecast to save on monthly bills through going solar by 2020. Sungevity makes solar simple, and now will provide public investors the opportunity to gain exposure to the accelerating growth of the solar adoption curve. We believe that our merger with Sungevity will accelerate the pace of its growth and create superior value for our shareholders.”

Sungevity helps homeowners and businesses in the U.S. and Europe reduce their cost of electricity through the sale of clean energy systems. The company focuses on high-value business components in-house, including software development and customer relationship management, and outsources functions requiring significant investment in assets to a curated ecosystem of lead generators, resellers, installers, financiers and supply chain partners. The result is an asset-light, sustainable business model that is scalable, thrives on relatively modest levels of capital and enables a path to profitability and cash flow generation. This stands in sharp contrast to the capital-intensive, asset-driven and vertically integrated model now ubiquitously deployed in today’s downstream solar market.

“We have always considered ourselves to be the ‘disruptor’ within a disruptive industry,” said Andrew Birch, Sungevity’s Co-Founder and Chief Executive Officer. “Easterly’s management has a track record of bringing innovative, growing companies to public shareholders and we expect that our merger will enhance our ability to innovate and grow as we strive to provide the highest customer experience to our expanding customer base.”

Key Transaction Terms

Under the terms of the definitive agreements for the transaction, at closing, the following will occur:

  • Sungevity’s existing stockholders will roll over all of their existing equity into Sungevity Holdings and, together with Sungevity’s management, retain approximately 58.8 percent ownership, assuming no redemptions by Easterly’s stockholders.
  • It is estimated that the $200 million contained in Easterly’s trust account, less fees and expenses and amounts distributed upon redemption of shares of Easterly common stock, will be used following the closing by Sungevity for its business operations and will remain on its balance sheet.
  • The anticipated initial implied market capitalization, including fees and expenses, is estimated to be approximately $607 million, assuming no redemptions by Easterly stockholders.

The transaction has been unanimously approved by both boards of directors of Easterly and Sungevity, and is expected to close in the third or fourth quarter of 2016, subject to all requisite regulatory approvals, approval of the stockholders of each of Easterly and Sungevity, and other customary conditions, including Easterly having available cash of at least $75 million. The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the definitive merger agreement relating to the transaction, a copy of which will be filed by Easterly as an exhibit to a Current Report on Form 8-K.

 

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This post was prepared by Solar Thermal Magazine staff.

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