The reason behind SunEdison's $2.2 billion purchase of Vivint Solar
In a deal valued at $2.2 billion, clean energy company SunEdison Inc. agreed to purchase Vivint Solar Inc. to speed up its expansion.
Vivint Solar is one of the largest U.S. companies that installs solar panels on household rooftops, and news of the deal sent Vivint Solar’s stock up over 40 percent on Monday, July 20, according to Fortune. The company allows homeowners to lease its systems rather than buying them outright, resulting in an increase in popularity amongst consumers.
SunEdison shares were up 2.9 percent at $32.48, after touching a near-seven-year high of $33.44, on the New York Stock Exchange, according to Reuters.
The deal is the latest move by SunEdison to aggressively expand across the clean energy industry and it highlights the quickly growing market for rooftop solar panel systems.
Along with the announcement of the deal, SunEdison also said that it is raising its 2016 annual guidance of 2,800 to 3,000 megawatts of clean energy projects under development, to 4,200 to 4,500 megawatts under development—a 50 percent increase.
Details of the deal
Closing the deal, SunEdison will give Vivint Solar stockholders $9.89 in cash, $3.31 in stock and $3.30 in notes for every share held. According to Reuters, the offer works out $16.50 per share—a 51.7 percent premium.
SunEdison also said its unit TerraForm Power Inc. would eventually buy Vivint's rooftop solar portfolio of 523 megawatts, expected to be installed this year, for $922 million.
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The offer works out to four times Vivint's retained value of $560 million as of March 31, Raymond James analyst Pavel Molchanov told Reuters.
The acquisition requires approval by Vivint Solar stockholders and will face reporting requirements. The deal is expected to close in the fourth quarter of 2015.
The changing face of the market
As the market for home solar panels grows, it is sure to face increased consolidation, states Fortune. The source predicts that larger companies will continue to more effectively battle for valuable rooftops that can cost effectively go solar.
More solar panels were installed on U.S. homes in the first quarter of this year than ever before. In the first quarter, 437 megawatts of solar panels were installed on home rooftops, which was a 76 percent increase from the first quarter of 2014, according to the Solar Energy Industry Association.
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Over the next five years, another 3 million new home rooftop solar systems are expected to be installed in the U.S.
“Companies that can raise large funds to pay for the installations of the systems and can spend a lot of money marketing to targeted customers will win out,” wrote Fortune. “The biggest companies are trying to expand vertically across the sector, adding on more types of businesses to lower their costs.”
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Intelliwave SiteSense boosts APTIM material tracking
“We’ve been engaged with the APTIM team since early 2019 providing SiteSense, our mobile construction SaaS solution, for their maintenance and construction projects, allowing them to track materials and equipment, and manage inventory.
We have been working with the APTIM team to standardize material tracking processes and procedures, ultimately with the goal of reducing the amount of time spent looking for materials. Industry studies show that better management of materials can lead to a 16% increase in craft labour productivity.
Everyone knows construction is one of the oldest industries but it’s one of the least tech driven comparatively. About 95% of Engineering and Construction data captured goes unused, 13% of working hours are spent looking for data and around 30% of companies have applications that don’t integrate.
With APTIM, we’re looking at early risk detection, through predictive analysis and forecasting of material constraints, integrating with the ecosystem of software platforms and reporting on real-time data with a ‘field-first’ focus – through initiatives like the Digital Foreman. The APTIM team has seen great wins in the field, utilising bar-code technology, to check in thousands of material items quickly compared to manual methods.
There are three key areas when it comes to successful Materials Management in the software sector – culture, technology, and vendor engagement.
Given the state of world affairs, access to data needs to be off site via the cloud to support remote working conditions, providing a ‘single source of truth’ accessed by many parties; the tech sector is always growing, so companies need faster and more reliable access to this cloud data; digital supply chain initiatives engage vendors a lot earlier in the process to drive collaboration and to engage with their clients, which gives more assurance as there is more emphasis on automating data capture.
It’s been a challenging period with the pandemic, particularly for the supply chain. Look what happened in the Suez Canal – things can suddenly impact material costs and availability, and you really have to be more efficient to survive and succeed. Virtual system access can solve some issues and you need to look at data access in a wider net.
Solving problems comes down to better visibility, and proactively solving issues with vendors and enabling construction teams to execute their work. The biggest cause of delays is not being able to provide teams with what they need.
On average 2% of materials are lost or re-ordered, which only factors in the material cost, what is not captured is the duplicated effort of procurement, vendor and shipping costs, all of which have an environmental impact.
As things start to stabilise, APTIM continues to utilize SiteSense to boost efficiencies and solve productivity issues proactively. Integrating with 3D/4D modelling is just the precipice of what we can do. Access to data can help you firm up bids to win work, to make better cost estimates, and AI and ML are the next phase, providing an eco-system of tools.
A key focus for Intelliwave and APTIM is to increase the availability of data, whether it’s creating a data warehouse for visualisations or increasing integrations to provide additional value. We want to move to a more of an enterprise usage phase – up to now it’s been project based – so more people can access data in real time.