SolarCity Corp. and Paramount GR Holding, LLC, dba Paramount Equity, announced on August 13th, 2013, that they have entered into a definitive agreement for SolarCity to acquire the assets of Paramount Energy Solutions, LLC dba Paramount Solar, a subsidiary of Paramount Equity, in a transaction valued at approximately $120 million. Under the terms of the agreement, SolarCity will acquire the Paramount Solar business for $116.3 million in stock, and the remainder in cash. Paramount Equity CEO Hayes Barnard will join SolarCity as chief revenue officer in charge of the company’s sales and marketing organizations upon closing of the acquisition.
Paramount Solar, one of SolarCity’s most successful channel partners, is majority-owned by Guthy│Renker, the company behind Proactiv Solution and one of the world’s leading direct marketing companies. In connection with the acquisition, Ben Van de Bunt, longtime CEO of Guthy│Renker LLC, is expected to join SolarCity’s board of directors later this year, subject to nomination procedures and board approval.
“SolarCity has developed what I believe to be the best field sales and marketing organization in the solar industry. The national residential solar market has been growing between 60-70 percent annually, and we’ve been growing at twice that rate—144% year over year in the most recent quarter—and had three times the market share of our nearest competitor in 2012,” said SolarCity CEO Lyndon Rive. “Now we’ve found the perfect complement. Hayes Barnard and Guthy│Renker have built what I strongly believe to be the best virtual sales organization in the solar industry, with an extraordinary ability to acquire customers at a low cost. We expect the addition of Hayes, Ben and the Paramount Solar team to help us attain our goal to reach one million customers in the next five years at an even lower cost than was previously possible.”
SolarCity expects a more significant impact from the acquisition in 2014, but it is updating 2013 guidance to 278 MW to account for Paramount Solar’s backlog of uninstalled customers. SolarCity is already the number one full-service solar provider in the nation with more than 3,300 employees, more than 68,000 customers and more than 400 megawatts (MW) deployed. Approximately one in every five new residential solar customers in the U.S. chooses SolarCity, according to data from GTM Research. The company’s goal to reach one million customers equates to approximately 6,000 MW deployed, or six gigawatts of total generation capacity.
The transaction is structured as the acquisition of all of the assets and the assumption of certain liabilities of the business of Paramount Energy Solutions, LLC. The transaction is expected to be completed in September, subject to customary closing conditions. Following the completion of the acquisition, Paramount Equity Mortgage, LLC, Value360, LLC, and Ironstone Insurance LLC, the remaining divisions of Paramount Equity, will continue to operate as independent companies.
