Finavera Wind Energy Inc. has signed an agreement to acquire residential solar installations provider Solar Alliance of America Inc. for a cash and share deal.
In 2013, San-Diego-based Solar Alliance had US$20.7 million in revenue. Under the terms of the agreement, Finavera will acquire 100% of the equity in Solar Alliance 11.9 million 915,238 shares of Finavera and contingent payments of up to US$4 million in cash comprising of up to four instalments of US$1 million each.
The contingent payments are subject to Solar Alliance meeting certain revenue targets during any of the fiscal quarters beginning after the closing date of the agreement and ending on or before December 31, 2017. As part of the purchase price, Finavera will advance US$1.2 million to Solar Alliance, of which US$400,000 is an advance to be deducted from the future contingent payments. The balance of the payment will be for working capital and business expansion.
“The residential solar market in America represents a revolution for distributed renewable power generation.” said Finavera CEO Jason Bak. “The market for residential solar power in America is expected to be 100 gigawatts by 2020, which is 100X today’s market. The acquisition of Solar Alliance provides an exciting growth platform for Finavera to capitalize the expansion of this market and the opportunities it will present. We plan to grow Solar Alliance organically throughout California and make further acquisitions in order to become a significant player in the US residential solar market. This expansion will create value for the Company in the near term, with much greater long term potential for shareholders.”