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Solar Alliance is an energy solutions provider focused on the commercial, utility and community solar sectors.

Ontario — Solar Alliance Energy has announced its intention to acquire a thriving Canadian solar company in a predominantly share-based transaction.

The target company, based in Alberta, has experienced substantial growth in the commercial and utility solar industry. With unaudited revenue of $5,801,023 for the fiscal year 2023, the company holds a solid backlog of contracted projects valued at over $5.6 million, projecting continued revenue growth.

According to Solar Alliance CEO Myke Clark, this acquisition will have a significant impact on the company’s financial position, with anticipated improvements in both top and bottom-line results. The target company, known for its profitability and strong growth, is highly respected within the Alberta solar industry.

The acquisition will considerably enhance the scale of Solar Alliance and provide access to the rapidly expanding Canadian solar market, positioning the company for positive cash flow following the transaction. The timing aligns favorably with the recent introduction of a 30% investment tax credit for renewable energy projects in Canada.

The acquisition is valued at $6 million, primarily composed of share-based consideration. This structure ensures long-term alignment with current shareholders. The combined management teams’ expertise will complement Solar Alliance’s competitive advantage, particularly in pursuing larger solar projects in Canada and the United States.

Key transaction highlights include:

– The target company is a leading provider of commercial and utility solar solutions in Western Canada, with over 33 MW of solar projects installed.
– Their experience in commercial and institutional solar system design and installation dates back to 2013.
– A strong sales pipeline and contracted project backlog support the target company’s forecasted growth.
– The recent introduction of a 30% Investment Tax Credit in Canada’s Federal Budget is advantageous for the Canadian solar market.
– Operational synergies are expected through shared engineering services, administrative and accounting services, and procurement optimization.
– Enhanced buying leverage, decreased bonding costs, and reduced debt facility expenses are projected to generate long-term financing savings due to the increased scale.
– Following the transaction, on a fully diluted basis, target company shareholders will hold approximately 25% of Solar Alliance’s issued common stock.
– The non-binding Letter of Intent provides a 90-day exclusivity period for due diligence, finalizing transaction details, and entering into a binding definitive agreement. The target company’s name will be disclosed upon executing definitive agreements.

The completion of the proposed transaction is subject to various conditions, including satisfactory due diligence, shareholder approval, and approval from the TSX Venture Exchange.

Total consideration for the transaction amounts to $6,000,000, comprising $500,000 in cash, $700,000 in unsecured convertible debt, and $4,800,000 in common shares of Solar Alliance, along with share purchase warrants.

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