Sunnova to Become Lennar’s Exclusive Residential Solar, Storage Provider after Buying SunStreet Platform
Sunnova Energy International Inc. entered into an agreement with Len X — a technology-focused subsidiary of leading homebuilder Lennar Corporation — to acquire Lennar’s residential solar platform SunStreet. In addition, Sunnova signed a multi-year partnership to become Lennar’s exclusive residential solar and storage service provider for new home communities across the country. The acquisition of SunStreet is expected to be completed during the second quarter of 2021.
“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. “Sunnova’s success is built on strong partnerships and shared vision, and this transaction will be no different thanks to our complementary strengths and mutual desire to transform the energy landscape.”
Strategic Rationale: Created by Lennar, SunStreet has a distinct understanding of homebuilding operations. This acquisition will allow Sunnova to generate significant shareholder value, increase customer growth, and develop residential microgrids across the U.S. Sunnova will also be able to work with existing SunStreet solar customers to add battery storage and other offerings. We’re talking 250,000+ existing homes built by Lennar in the last decade, and the ~40,000 that are solar-only.
Under the multi-year strategic partnership:
• Sunnova will become Lennar’s exclusive residential solar and storage service provider
• Through LENX, 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
Acquisition Details: 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.