Sunergy to go public in $475 million valuation SPAC merger


Sunergy Renewables, a New Port Richey, Florida-based residential solar and energy efficiency installer, announced plans to go public at $475 million enterprise value.

The company announced its intent to combine with ESGEN Acquisition Corp., a special purpose acquisition company, in a transaction that would result in the combined company becoming a publicly listed company on the Nasdaq exchange.

For 2022, Sunergy installed more than 2,400 solar systems, generated $123 million of revenue and $11 million in earnings before taxes, interest, depreciation, amortization, or EBITDA, a common financial performance and corporate valuation metric. The Florida company provides rooftop solar installations as well as battery storage systems and energy efficiency solutions which include insulation and roofing systems in various states such as Florida, Texas and Arkansas.

Sunergy sells residential solar systems through a proprietary sales approach that maximizes lead generation and conversion processes. The company uses a custom software platform to augment sales and uses a customer relationship management system to track key performance indicators across the sales cycle. The installer is a SunPower elite dealer and certified Tesla Powerwall energy storage systems installer.

“We believe this combination represents a transformative step on our path to grow as a vertically integrated company,” said Tim Bridgewater, chief executive officer and co-founder of Sunergy.  “The proceeds from the transaction will help Sunergy scale more rapidly to meet the current demand we are seeing from our customers who desire to reduce high energy bills and contribute to a sustainable future.”

“Our primary objective at ESGEN is to partner with sound, scalable and profitable companies we believe will fundamentally disrupt the current energy landscape and take advantage of markets experiencing generational growth,” said Andrejka Bernatova, chief executive officer of ESGEN. “We want to simultaneously accelerate a shift to a low-carbon future.”

ESGEN is a SPAC investment platform formed by Energy Spectrum Capital, a Dallas-based energy private equity firm with $4.5 billion of invested commitments. The SPAC is managed by the firm’s Energy Spectrum Partners VIII fund affiliate, which is also invested in Nightpeak Energy, an Oakland, Calif.-based energy storage platform managed by former Recurrent Energy executives.

Financial overview

Sunergy’s go-public transaction is being funded with proceeds of $65 million in cash, underpinned by $10 million of common stock private investment in public equity (PIPE) financing commitment from Energy Spectrum Partners, valued at $10 per share.

The company said the transaction proceeds will fund operations and growth opportunities, with the SPAC transaction expected to close during Q4 2023.

Cohen & Company Capital Markets, a boutique investment banking business of JVB Financial, a New York debt investment firm, advised ESGEN on the SPAC combination, while Kirkland & Ellis was the sponsor’s legal advisor.

Eversheds Sutherland and Ellenoff Grossman & Schole are counsel to Sunergy.

SPAC market burst

According to an S&P Global Market Intelligence report, SPAC merger activity involving clean energy companies has largely collapsed since Q1 2021. The energy transition was a key beneficiary to the SPAC trend, with numerous electric vehicle, EV charging infrastructure and energy storage companies to go public over a short timeframe through early 2021.

The SPAC market collapsed amid tightening investor scrutiny tied to regulatory loopholes closed from previous allowances for target companies to go public with overstated financial projections, with numerous companies involved in SPAC mergers now seeing dwindling stock performance, the report notes.

Through Q1 2021, the most active quarter, SPAC IPO’s across all sectors peaked at 311 deals valued at $99.7 billion in aggregate transaction values, while subsequent quarters saw an average of about 73 SPAC deals and $12.4 billion average quarterly transaction values, according to S&P Global.

Tigo Energy, a provider of solar inverter, electronics and energy storage products, revealed plans in December 2022 to go public through a SPAC merger with Roth CH Acquisition IV Company (ROCG), a platform managed by Roth Capital Partners and Craig-Hallum Capital Group. That deal is valued at $600 million pre-money equity valuation and expected to close by June 30, 2023.

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