Texas — Sunnova and Lennar announced they have entered into a definitive agreement under which Sunnova will acquire Lennar’s residential solar platform (“SunStreet”).
In addition to Sunnova’s acquisition of SunStreet, Sunnova will become Lennar’s exclusive residential solar and storage service provider for new home communities with solar across the country.
“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 William J. (John) Berger, Chief Executive Officer of Sunnova.
“The sale of SunStreet to Sunnova underscores our longstanding focus on and strategy around technology and ESG investment in Lennar’s future,” said Stuart Miller, Executive Chairman of Lennar.
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 U.S. Sunnova will be able to bring SunStreet’s proven track record of high-quality, timely installations to additional homebuilders, while working with existing SunStreet customers to enhance their energy independence through the addition of battery storage and other offerings. As Sunnova’s business impact grows, so too will its positive social and environmental impact, helping the company achieve its overarching mission of powering energy independence.
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.