Construction workers will install SunPower tiles in their home in San Ramon, California.
Robert Nickelsburg | Getty Images
Sunpower On Tuesday, it said it was restructuring its business to focus on the fast-growing residential solar market. The company is considering buying its residential solar provider, Blue Raven, as well as selling its commercial and industrial businesses.
SunPower CEO Peter Faricy said the acquisition was natural for several reasons, including Blue Raven’s customer-first approach in line with SunPower’s motto. In addition, more than 90% of Blue Raven’s customers are in 14 states, which account for only 5% of SunPower’s sales. In other words, the acquisition expands SunPower’s footprint where SunPower is struggling to gain market share.
“From a strategic point of view, this transaction is an example of what makes it possible to serve consumers much faster than other methods,” said Farici, who said the transaction was positive for revenue and EBITDA from day one. I added that.
SunPower has more than 20,000 customers from Blue Raven and will be added to 376,000 home customers at the end of the second quarter.
The total transaction value of the acquisition is up to $ 165 million and the cash required to close the transaction is up to $ 145 million. SunPower used cash from the business to fund the acquisition, most of which was raised after the company sold one million shares. Enphase Energy..
According to Falicy, the commercial and industrial solar segment is an attractive business area that will continue to grow significantly, but the company’s decision to sell this division results in capital allocation and streamlined business opportunities. bottom.
He said the unit was of interest to potential buyers, but did not reveal his personal name. Faricy also noted the attractiveness of assets, saying that SunPower is currently making money in commerce and industry through managing contracts, but future owners will have access to both operational management and financing aspects. rice field.
SunPower will use the proceeds from the potential sale to reinvest in new core housing businesses such as customer acquisition and expansion of digital services for homeowners.
“In our case, we’re happy that investors can clarify this highly focused strategy and focus on housing advances,” Falicy said.
Rebuilding this property is not the first time for SunPower. In August 2020, the company spun out a PV module manufacturer Maxeon SolarHowever, the two separate entities will continue to work together.
Shifting the company’s focus to individual consumers is probably justified for Faricy, who commanded SunPower in April. He was previously the CEO of Discovery Inc.’s Global Direct Consumers and Vice President of the Amazon Marketplace.
While commercial and industrial solar provides an alternative growth vehicle, most of SunPower’s revenue comes from the housing business.
Full-year 2020 sales for residential and light industry totaled $ 884 million, while commercial and industrial units generated $ 254.8 million. Housing units are also more profitable. Gross margin per watt jumped from 19 cents in 2019 to 66 cents this year, while gross margins in the commercial and industrial sectors fell from $ 0.25 to $ 0.06 over the same period.
“The fact is that the housing business is bigger, growing faster and more profitable,” Falicy summed up. “”[Residential] It’s a good place to focus on moving forward, and I think it’s been well received by investors. “
In the future, SunPower wants to be a one-stop shop for consumers. Instead of building a one-time customer relationship when installing the system, the company is adding a number of digital products, including energy storage, electric vehicle capabilities, and energy management systems.
In recent years, the number of residential solar facilities has increased rapidly. However, by the end of 2020, only 2.7 million homes across the United States, or 3%, had rooftop panels.President Joe Biden’s climate agenda shows that solar power starts at 3% today 40% by 2035.. To achieve these goals, solar equipment will need to grow exponentially over the next few years.
However, opportunities do not always lead to returns for investors looking to take advantage of long-term trends. After the 2020 banner, the inventory of solar power decreased in 2021. Supply chain bottlenecks, rising raw material costs, and policy uncertainty are among the factors that have lowered sentiment.
Faricy said SunPower remains largely isolated from chip shortages and the company has visibility until the end of the calendar year. However, he said the supply chain was a “lifetime challenge” and acknowledged the difficulty of securing components.
SunPower’s share price rose 2% during pre-market trading on Tuesday.
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Sunpower announces restructuring aimed at doubling the housing market
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