Real Goods Solar said Wednesday it has signed an agreement to buy Alteris Renewables, a deal that will merge two solar installers from two opposite corners of the country.
Real Goods, based in Colorado, plans to offer 8 million of its shares to Alteris’ investors for the acquisition, which should be completed in the third quarter of this year. Based on the share prices of Real Goods, the acquisition could be valued at around $20 million. The company’s stock closed at $2.48 per share on Tuesday and is up nearly 7 percent to reach $2.65 per share in recent trading on Wednesday.
The merger will expand Real Goods’ offerings and help the company to better compete with a growing number of solar installers. The residential and commercial markets served by Real Goods and Alteris are growing quickly and made up 72 percent of the U.S. market in 2010, according to the Solar Energy Industries Association and GTM Research. Overall, the U.S. market is set to double the amount of new solar energy generation from 887 megawatts in 2010 to 1.8 gigawatts in 2011.
Some newer entrants into the solar energy service business have been able to raise sizable funds to pay for installations and make money from leases and power purchase agreements. Google recently committed $280 million to finance residential installations by California based SolarCity. Borrego Solar Systems, also based in California, announced Tuesday it had lined up $46 million from U.S. Bancorp and East West Bancorp for erecting solar electric systems for business and government customers in Massachusetts, New Jersey and California.
Both Real Goods and Alteris have a long history of installing solar electric systems at homes and businesses in the west and northeast. Real Goods, which started in 1978, operates in California and Colorado while Alteris, based in Connecticut, serves states such as Massachusetts, Vermont, New York, New Jersey, Pennsylvania and Connecticut.
Alteris was created from the merger of Solar Works and SolarWrights in 2008, and Solar Works traces its genesis back to 1980. Riverside Partners in Boston owns the controlling interest in Alteris. Alteris said it has installed nearly 30 megawatts of systems overall, according to its website.
Besides announcing the merger, Real Goods also said it has hired a new CEO, Bill Yearsley, who was previously the chief executive of construction and Aggregate Group.
For the first quarter of this year, Real Goods reported $17.4 million in revenue, up 16.1 percent from the year-ago quarter. It more than doubled the net income to $37,000 from $17,000.
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