Solar Acquisitions and Consolidation Is Bullish for the Sector - Global Deal Flow on the Rise
Point Roberts, Washington and Delta, British Columbia--(Newsfile Corp. - July 30, 2020) - Investorideas.com, a global news source and leading investor resource covering cleantech and renewable energy stocks issues a sector snapshot looking at acquisitions and consolidation in the solar sector, featuring SinglePoint, Inc. (OTCQB: SING).
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The solar industry is witnessing a global consolidation amidst the pandemic. According to CX Tech, "Fresh data from China's solar power industry association suggests the sector is consolidating, as big companies produce a greater share of the world's largest solar market's cells and components and smaller ones are pushed out."
"The nation's ten largest photovoltaic companies by output accounted for some three quarters of China's solar cell production in the first half of 2020, up from about 55% in January."
What does this mean for the sector? According to Shawn Kravetz, Esplanade Capital, this is very bullish, noting, "After Consolidation, Solar Will Shatter Expectations."
On trend within the sector in the US, SinglePoint, Inc. (OTCQB: SING) just announced that its majority owned subsidiary, Direct Solar of America, LLC , has entered into a Letter of Intent ("LOI") to acquire Standard Eco Solar ("Standard Eco"), a developer and installer of grid-tied solar electric systems in Texas, Illinois, and Arizona for a combination of cash and stock. Direct Solar and SinglePoint are currently conducting due diligence and SinglePoint will issue common stock once the definitive agreement and audit are completed, facilitating this investment through Direct Solar of America. The transaction is expected to close no later than December 2020. Standard Eco achieved unaudited revenues of $11,345,061 in 2019 and was operationally profitable in both years.
From the news: Pablo Diaz, CEO of Direct Solar of America, stated, "We are excited to have entered into this LOI and to begin the work necessary to complete this important acquisition. We believe there is a significant opportunity to embark on a roll up strategy in the solar industry and we see this potential acquisition as an important first step forward for Direct Solar in achieving the goal of being the premier national residential and commercial solar provider. We look forward to reaching a definitive agreement and to add the experienced management and financial strength that comes with this acquisition, as we work to build significant long-term value within our business and for the SinglePoint shareholders."
From the news This is the first acquisition from the recently announced national solar expansion through targeted business acquisitions for SinglePoint and Direct Solar. This intended acquisition will broaden the combined service offering expertise and increase the revenue base in additional to expand gross profits. Standard Eco represents an ideal acquisition that is well positioned to leverage and compliment the sales and customer acquisition platform built by Direct Solar that has recently expanded its nearly national footprint to cover 34 states, including Texas, Illinois, and Arizona where Standard Eco currently operates. Direct Solar intends to use this potential transaction, when completed, as a catalyst for its recently announced national solar installation roll up strategy. We will continue to target accretive companies within the Solar and Renewable Energy space that can benefit from our national footprint and meet our previously announced acquisition strategy. Our goal is to become the national leader in residential and commercial solar solutions and offerings operating in all 50 states.
From the news: "Our intended acquisition of Standard Eco complements our overall strategy of providing full spectrum, market leading solutions to Direct Solar's solar customers as we continue our national expansion through a combination of organic growth and targeted acquisitions that will enhance and deepen our services within our footprint," said Wil Ralston, President, SinglePoint Inc. "This acquisition leverages many of Direct Solar's core capabilities and we look forward to the opportunity to expand and grow the overall revenue through expanded solar services."
The solar consolidation trend is indeed global, as PV magazine reports on deal flow in France noting,"Two module manufacturers, Systovi and Voltec Solar, plan to join forces to create a bigger player in the French solar manufacturing space."
What does this mean for investors? This trend is their friend as Barrons reported following the Sunrun and Vivint Solar deal. "Investors clearly like the idea. Sunrun stock, which has nearly doubled this year, was up 24.5% to $26.57 near midday Tuesday. Barron's had recommended the stock last year, when it traded at $14.93. Vivint Solar was up 36.7% to $14.53, while the Dow Jones Industrial Average was down 0.6%."
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