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For $2.2 Billion, SunEdison Will Buy Vivint Solar in Mega Energy Deal - Stocks in the News

Announced Monday, renewable energy company SunEdison Inc's ( SUNE ) subsidiary TerraForm Power Inc ( TERP ) will acquire Vivint Solar Inc ( VSLR ), a residential solar energy provider, for approximately $2.2 billion in cash and stocks.

According to the terms of the deal, Vivint shareholders will receive $16.50 per share in cash, shares, and convertible debt. Broken down, that's $9.89 a share in cash, $3.31 a share in SunEdison stock, and $3.30 a share in SunEdison convertible debt. This reflects a 52% premium to Vivint's closing price last Friday.

As part of the deal, SunEdison would sell Vivint's rooftop solar power portfolio for $922 million in cash to a subsidiary of TerraForm Power.

For SunEdison, buying Vivint Solar is just another purchase in a series of successful transactions. Just last November, the company acquired First Wind, a developer and producer of wind farms, for $2.4 billion. The acquisition can be expected to close in the fourth quarter of 2015. It's subject to stockholder and regulatory approval.

In a news release , SunEdison CEO and TerraForm Power chairman Ahmad Chatila said "SunEdison's acquisition of Vivint Solar is a logical next step in the transformation of our platform… we expect the Vivint Solar transaction to create significant value for our stockholders through the accretion in our TerraForm Power ownership, the acceleration of our Incentive Distribution Rights and an immediate expansion of our capacity and bandwidth to grow our residential business in the U.S. and globally. "

"SunEdison and TerraForm Power have built a unique model that recognizes the value of long-term, predictable, contracted cash flows from our residential solar portfolio while providing access to a broad pool of financing at an attractive cost of capital. We are excited to join the SunEdison residential and small commercial team which has successfully developed a wide range of channels complementing those at Vivint Solar," said Greg Butterfield, Vivint Solar's CEO.

SunEdison was advised by Bank of America Merrill Lynch and Goldman Sachs; TerraForm was advised by Barclays, CitiGroup, and Lazard; Vivint Solar was advised by Morgan Stanley.

SUNE stock is a strong performer Monday morning, up 3.94% since market morning; the company ranks a #3 (Hold) on the Zacks Rank. TERP stock, however, is falling, down 2.11% on the day; they're currently a Zacks Rank #4 (Sell). VSLR stock is unsurprisingly soaring, up 44.30% since trading began and expected to rise even more; the company is currently a #3 (Hold) on the Zacks Rank.

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SUNEDISON INC (SUNE): Free Stock Analysis Report

TERRAFORM POWER (TERP): Free Stock Analysis Report

VIVINT SOLAR (VSLR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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