Sunnova Enters into Definitive Agreement to Acquire SunStreet—Lennar’s Residential Solar Platform for Homebuilders
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“We are thrilled to announce our acquisition of SunStreet, and our new strategic partnership with Lennar, which will be a first of its kind in the industry geared towards creating innovative pathways for how new communities are powered,” said
“The sale of SunStreet to Sunnova underscores our longstanding focus on and strategy around technology and ESG investment in Lennar’s future,” said
The global energy landscape is undergoing an incredible transformation and consumers are demanding more from their energy service providers, especially as people spend more time in their homes and as weather events continue to worsen due to climate change. This consumer awakening is challenging the traditional, centralized power infrastructure, and now more than ever, consumers want access to clean, affordable and reliable power.
Created by Lennar, SunStreet has a distinct understanding of homebuilding operations that has earned the company a reputation for being a proven leader in the residential solar market for homebuilders. This acquisition will provide a new strategic path that will allow Sunnova to generate significant shareholder value, increase customer growth, and develop clean and resilient residential microgrids across the
Sunnova SunStreet Acquisition Advantages Include:
- Captive pipeline: A multi-year supply of homesites and leading market share drives visibility, resulting in higher option value
- Lower costs: Reduced customer acquisition cost driven by making solar a standard feature
- Production platform: SunStreet’s seamless integration into the homebuilding process avoids potential operational interruptions
- Upsell Opportunities: to upsell many of the 250,000+ existing homes built by Lennar in the last decade, and the ~40,000 solar-only SunStreet installations, with Sunnova’s broad portfolio of solar and battery storage service offerings, subject to applicable privacy laws
In connection with acquiring Lennar’s residential solar platform, Lennar and Sunnova have agreed to a multi-year strategic partnership, with the potential to align the strategic and economic interests of both companies, with a focus on enhancing Sunnova and SunStreet’s full growth potential. Under the multi-year strategic partnership:
- Sunnova will become Lennar’s exclusive residential solar and storage service provider
- Through LENX, a subsidiary of Lennar, the strategic partnership will focus on the development and rollout of innovative energy technologies, such as home storage and community microgrids
- LENX will maintain an equity ownership interest in Sunnova as well as a commitment to provide tax equity investments to support Sunnova’s homebuilder customer pipeline
- Sunnova and Lennar share a vision and business ethos to create value for their shareholders by further propelling the energy transition towards decarbonization, and providing cleaner more reliable energy solutions to homeowners
Under the terms of the agreement and earnout agreement, LENX will receive total consideration of up to 7.22 million shares of Sunnova common stock, which is comprised of 3.33 million shares in initial consideration payable at closing and 3.89 million shares in consideration associated with two earnouts. The first earnout of up to 2.78 million shares is associated with achieving certain annual customer commitments over four years. The second earnout of up to 1.11 million shares is associated with the development microgrid communities over the next five years. The transaction also provides for certain registration rights for LENX with respect to the shares of Sunnova common stock it will receive as consideration.
The transaction has been structured in a manner intended to cause the receipt of Sunnova common stock as a result of the agreement not to be a taxable event for Lennar. Lennar has agreed to guarantee the performance of LENX under the merger agreement and certain ancillary agreements.
Both Sunnova and LENX have received the necessary approvals for the definitive agreement.
The acquisition of SunStreet is expected to be completed during the second quarter of 2021, subject to regulatory approvals and other customary closing conditions.
Conference Call Information:
Sunnova and Lennar are hosting a joint conference call for analysts, investors and media to discuss the definitive agreement and strategic partnership at
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of Sunnova’s website at www.sunnova.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expect," "plan," "anticipate," "going to," "could," "intend," "target," "project," "contemplates," "believe," "estimate," "predict," "potential" or "continue" or the negative of these words or other similar terms or expressions. Similarly, statements herein that describe the acquisition, including its financial and operational impact, impacts on shareholder value or customer growth, the timing of the acquisition, and other statements of the parties’ or management’s plans, expectations, objectives, projections, beliefs, intentions, goals, and statements about the benefits of the acquisition, statements that describe the strategic partnership, including its financial and operational impact, the terms of the strategic partnership, including exclusivity and duration, new energy technologies, any commitments with respect to tax equity, the ownership of Sunnova by LENX, and other statements that are not historical facts are also forward-looking statements. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of Sunnova, SunStreet, Lennar, LENX or the price of Sunnova stock or Lennar stock. Sunnova's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including, but not limited to, the unpredictability of the commercial success of Sunnova’s, SunStreet’s, Lennar’s or LENX‘s respective businesses or operations; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the acquisition; the risk that any announcements relating to the acquisition could have adverse effects on the market price of common stock of Sunnova or Lennar; the ability of the parties to consummate the acquisition on a timely basis or at all and the satisfaction of the conditions precedent to consummation of the acquisition, including, but not limited to, negotiation and delivery of the strategic partnership agreements and other agreements, completion of satisfactory diligence and regulatory approvals; the ability of the parties to negotiate the terms of the strategic partnership and other agreements or at all; the favorability to either party of the terms of the strategic partnership; the possibility that the acquisition may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the ability to successfully integrate the businesses; the ability of Sunnova to implement its plans, forecasts and other expectations with respect to SunStreet’s business or the strategic partnership after the completion of the acquisition and realize expected benefits; the diversion of management’s attention from ongoing business operations and opportunities; the impact of COVID-19; competition and fluctuations in the solar and home-building markets; availability of capital; ability to attract and retain dealers and customers and our dealer and strategic partner relationships; and litigation relating to the acquisition and the strategic partnership. These forward-looking statements speak only as of the date of this communication, and Sunnova and Lennar expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Sunnova’s or Lennar’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Sunnova and Lennar, including the most recent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, for additional information about Sunnova and Lennar and about the risks and uncertainties related to the businesses of Sunnova and Lennar which may affect the statements made in this communication.
Alina Eprimian, Media Relations Manager