Sunlight Financial, a U.S.-based residential solar financing platform, has signed an agreement for a business combination with Apollo Global Management-backed Spartan Acquisition Corporation II, a special purpose acquisition company (SPAC), resulting in Sunlight Financial becoming a public company.
The combined company, which will be named Sunlight Financial Holdings and listed on the New York Stock Exchange on the closing of the transaction, will have a market value of $1.3 billion. The transaction is expected to be completed in the second quarter of 2021.
Upon the closing of the transaction, Sunlight Financial will be the sole operating subsidiary of the combined company, and its existing team will continue to lead the business of the combined company.
Sunlight Financial has funded more than $3.5 billion of loans through its solar financing platform. It has also arranged funding for over 100,000 residential solar systems, which will produce over 500 MW of solar energy while reducing 10 million metric tons of carbon dioxide emissions.
Canadian-American investor Chamath Palihapitiya, Coatue, funds and accounts managed by Blackrock, and investment managers Neuberger Berman and Franklin Templeton will lead a $250 million funding in the combined company through the private purchase of Spartan’s Class A common stock at $10/share.
On closing the transaction, Sunlight Financial’s existing equity holders, including Tiger Infrastructure Partners, Hudson Sustainable Group, and FTV Capital, will own around 50% of the combined company’s share. Spartan stakeholders and institutional investors will hold around 26% and 19% of the combined company, respectively. The combined company’s board of directors will have representatives from Tiger Infrastructure Partners, FTV Capital, and Spartan.
Matt Potere, Chief Executive Officer of Sunlight Financials, said, “In strengthening our balance sheet and accessing Apollo’s strategic support this business combination, we expect to continue to scale the Sunlight platform to sustain and accelerate both revenue and earnings growth, and further establish our business as the premier point-of-sale financing platform for residential solar contractors and consumers.”
According to Mercom’s 2020 Q4 and Annual Solar Funding and M&A Report, 62 mergers and acquisition (M&A) deals were announced in the solar sector in 2020 compared to 65 in 2019. Most of the transactions involved solar downstream companies.