The #Solar Industry is Witnessing a Global Consolidation Amidst the
Pandemic (OTCQB: $SING) (NASDAQ: $RUN) (NYSE: VSLR) (NASDAQ: $TSLA) @_Singlepoint_ @Sunrun @VivintSolar @Tesla
Point Roberts WA, Delta BC, July 31, 2020 –
Investorideas.com, a global news source and leading investor resource covering
cleantech and renewable energy stocks issues a sector
snapshot looking at acquisitions and consolidation in the solar sector,
featuring SinglePoint, Inc. (OTCQB: SING).
Read this article, featuring SING in full at https://www.investorideas.com/news/2020/cleantech-climatechange/07311Solar-SING-RUN-VSLR-TSLA.asp
The solar industry is witnessing a global
consolidation amidst the pandemic.
According to CX Tech, “Fresh data from China’s solar power industry
association suggests the sector is consolidating, as big companies produce a
greater share of the world’s largest solar market’s cells and components and
smaller ones are pushed out.”
“The nation’s ten largest photovoltaic companies by
output accounted for some three quarters of China’s solar cell production in
the first half of 2020, up from about 55% in January.”
What does this mean for the sector? According to Shawn Kravetz, Esplanade Capital, this is very
bullish, noting, “After Consolidation, Solar Will Shatter Expectations.”
On trend within the sector in the US, SinglePoint,
Inc. (OTCQB: SING) just announced that its
majority owned subsidiary, Direct Solar of America, LLC , has entered into a
Letter of Intent (“LOI”) to acquire Standard Eco Solar (“Standard Eco”), a
developer and installer of grid-tied solar electric systems in Texas, Illinois,
and Arizona for a combination of cash and stock. Direct Solar and SinglePoint
are currently conducting due diligence and
SinglePoint will issue common stock once the definitive agreement and audit are
completed, facilitating this investment through Direct Solar of America.
The transaction is expected to close no later than December 2020. Standard Eco
achieved unaudited revenues of $11,345,061 in
2019 and was operationally profitable in both years.
From the news: Pablo Diaz, CEO of Direct Solar of America,
stated, “We are excited to have entered into this LOI and to begin the work
necessary to complete this important acquisition. We believe there is a
significant opportunity to embark on a roll up strategy in the solar industry
and we see this potential acquisition as an important first step forward for
Direct Solar in achieving the goal of being the premier national residential
and commercial solar provider. We look forward to reaching a definitive
agreement and to add the experienced management and financial strength that
comes with this acquisition, as we work to build significant long-term value
within our business and for the SinglePoint shareholders.”
From the news This is the first
acquisition from the recently announced national solar expansion through
targeted business acquisitions for SinglePoint and Direct Solar. This intended
acquisition will broaden the combined service offering expertise and increase
the revenue base in additional to expand gross profits. Standard Eco represents
an ideal acquisition that is well positioned to leverage and compliment the
sales and customer acquisition platform built by Direct Solar that has recently
expanded its nearly national footprint to cover 34 states, including Texas,
Illinois, and Arizona where Standard Eco currently operates. Direct Solar
intends to use this potential transaction, when completed, as a catalyst for
its recently announced national solar installation roll up strategy. We will
continue to target accretive companies within the Solar and Renewable Energy
space that can benefit from our national footprint and meet our previously
announced acquisition strategy. Our goal is to become the national leader in
residential and commercial solar solutions and offerings operating in all 50
states.
From the news: “Our intended acquisition of Standard Eco complements our overall
strategy of providing full spectrum, market leading solutions to Direct Solar’s
solar customers as we continue our national expansion through a combination of
organic growth and targeted acquisitions that will enhance and deepen our
services within our footprint,” said Wil Ralston, President, SinglePoint Inc.
“This acquisition leverages many of Direct Solar’s core capabilities and we
look forward to the opportunity to expand and grow the overall revenue through
expanded solar services.”
A major deal in the US made
headlines on July 6th as Sunrun (NASDAQ: RUN), a leading provider of residential solar, battery
storage and energy services, and Vivint Solar (NYSE: VSLR), a leading full-service residential solar provider
in the United States announced the companies have entered into a definitive
agreement under which Sunrun will acquire Vivint Solar in an all-stock
transaction, pursuant to which each share of Vivint Solar common stock will be
exchanged for 0.55 shares of Sunrun common stock, representing a combined
Enterprise Value of $9.2 billion based on the closing price of Sunrun’s shares
on July 6, 2020. Vivint Solar stockholders are expected to own approximately
36% and Sunrun stockholders are expected to own approximately 64% of the fully
diluted shares of the combined company. The exchange ratio implies a 10%
premium for Vivint Solar shares based on closing prices on July 6, 2020, and a
15% premium to the exchange ratio implied by the three month volume weighted
average price of Vivint Solar and Sunrun shares.
From the news: “Americans want clean and resilient energy. Vivint
Solar adds an important and high-quality sales channel that enables our
combined company to reach more households and raise awareness about the
benefits of home solar and batteries,” said Lynn Jurich, Sunrun’s Chief
Executive Officer and co-founder. "This transaction will increase our
scale and grow our energy services network to help replace centralized,
polluting power plants and accelerate the transition to a 100% clean energy
future. We admire Vivint Solar and its employees, and look forward to working
together as we integrate the two companies.”
The deal, according to Quartz “is the biggest
consolidation in the solar industry’s history, posing a threat to Tesla (NASDAQ: TSLA), the number-two competitor for rooftop panels.”
Bloomberg reported on the deal calling it, “The second
major U.S. energy deal in as many days -- following Berkshire Hathaway Inc.’s
$4 billion purchase of Dominion Energy Inc. assets -- also threatens to further
weaken Tesla’s grip on the rooftop-solar market and could inspire more sector
consolidation. Sunrun and Vivint combined provide about 75% of new residential
solar leases each quarter, according to BloombergNEF.”
The solar consolidation trend is indeed global, as PV magazine reports on deal flow in France
noting,“Two module manufacturers, Systovi and Voltec Solar, plan to join forces
to create a bigger player in the French solar manufacturing space.”
What does this mean for investors? This trend is
their friend as Barrons reported following the Sunrun and
Vivint Solar deal. “Investors clearly like the idea. Sunrun stock, which has
nearly doubled this year, was up 24.5% to $26.57 near midday Tuesday. Barron’s
had recommended the stock last year, when it traded at $14.93. Vivint Solar was
up 36.7% to $14.53, while the Dow Jones Industrial Average was down 0.6%.”
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