Sungevity to go public through acquisition by asset management firm

Sungevity

On Tuesday, Sungevity entered into an agreement for Massachusetts-based Easterly Capital to acquire the residential and commercial solar integrator. The deal is expected to close in the second half of this year, subject to conditions including regulatory approval and a vote of Easterly shareholders.

Until now Sungevity has been a private company, but through this acquisition Easterly would take the company public, by changing the name of the acquisition company to Sungevity Holdings. The re-named company will trade on the NASDAQ under the symbol SGVT.

Under the deal Sungevity’s existing investors will roll their equity into Sungevity Holdings, and together with Sungevity management will own 59% of the new company, assuming no redemptions by Easterly stockholders. The new company’s board of directors will be composed of members from the current boards of Easterly and Sungevity.

This would give Sungevity an implied market capitalization of $607 million, again assuming no redemptions. Citing the two companies, Reuters estimates the value of this deal at $357 million.

This is not Easterly’s first time in performing this sort of transaction. “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,” stated Sungevity Co-Founder and CEO Andrew Birch.

Sungevity says that the transaction and resulting capitalization will enhance its competitive position and accelerate its development. The company estimates that it has grown an average of 76% over the last five years. While this is faster than the U.S. residential market as a whole, the company must still compete with SolarCity, which has also grown quickly and holds a roughly 1/3 share of the residential market.