#Solar #Stocks Snapshot-Consolidation is Bullish for Sector (OTCQB: $SING) (NASDAQ: $RUN) (NYSE: $VSLR) (NASDAQ: $TSLA) @_Singlepoint_ @Sunrun @VivintSolar @Tesla
Read this article, featuring SING in full at https://www.investorideas.com/news/2020/cleantech-climatechange/07301SING-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.”
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%.”
Want to get more info on the sector? Visit the Cleantech and Climate Change Podcast page at Investorideas.com
Visit the renewable energy stocks directory: http://www.investorideas.com/Companies/RenewableEnergy/Stock_List.asp
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