Florida-based solar installer Sunergy goes public

NASDAQ

Sunergy Renewables, a leading Florida-based provider of residential solar and energy efficiency solutions, announced a definitive agreement for a business combination with ESGEN Acquisition Corp., a special purpose acquisition company backed by Energy Spectrum. The combined company will be a publicly listed company on the Nasdaq Stock Exchange. The pro forma implied enterprise value of the combined company is expected to be $475 million.

Founded in 2005 and headquartered in New Port Richey, Florida, Sunergy provides solar PV and battery-based power as well as storage systems for residential consumers. The company’s product portfolio of solar products, energy-efficient appliances, energy storage, insulation, and roofing services provides a range of benefits to homeowners, including meaningful utility cost savings, superior reliability compared to alternative sources, and energy independence.

“The partnership we announced with ESGEN is expected to enable Sunergy to continue to pursue our strategy in the residential solar market, bringing enhanced cost savings, reliability, and energy independence to our customers,” said Tim Bridgewater, Sunergy CEO and Co-Founder. “We believe this combination represents a transformative step on our path to grow as a vertically integrated company. The proceeds from the transaction will help Sunergy scale more rapidly to meet the current demand we are seeing from our customers who desire to reduce high energy bills and contribute to a sustainable future.”

Sunergy sells residential solar systems through a proprietary and differentiated sales approach that seeks to maximize lead generation and conversion efficiencies. The company leverages a custom software platform to augment sales efforts and uses a customer relationship management system to actively track key performance indicators across the sales cycle.

Sunergy believes its multi-tiered sales strategy minimizes customer acquisition costs and maximizes sales representative output. Additionally, Sunergy’s integrated installation business allows for greater control of the customer relationship. Benefits of this strategy include greater profitability potential, efficient navigation of local regulatory processes, and sustained customer satisfaction, which can lead to increased speed of project completion.

Sunergy’s methodical geographic expansion is focused on targeting specific geographic areas having attractive solar and distributed energy characteristics with less saturation from competing solutions, including high-growth markets in Florida, Texas, and Arkansas.

Andrejka Bernatova, CEO of ESGEN, stated, “Our primary objective at ESGEN is to partner with sound, scalable and profitable companies we believe will fundamentally disrupt the current energy landscape and take advantage of markets experiencing generational growth. We want to simultaneously accelerate a shift to a low-carbon future. Sunergy is an ideal partner to achieve our goals, and we look forward to working with Tim and his exceptional team at Sunergy in their next chapter of growth.”

Sunergy has a strong track record of financial performance and profitability. In 2022, the Company delivered approximately $123 million in revenue and approximately $11 million in EBITDA, underpinned by nearly 2,400 installations performed during the year.

Transaction Overview

The Transaction is currently anticipated to generate gross proceeds of up to approximately $65 million of cash, underpinned by a $10 million participation in the common stock PIPE by ESGEN’s sponsor, ESGEN LLC (to be funded by the sponsor’s affiliate Energy Spectrum Partners VIII LP (“Energy Spectrum”)) at $10.00 per share. Proceeds will be used to fund operations and growth.

After the Transaction, the Board of Directors of the combined company will include representatives from both Sunergy and ESGEN.

The Board of Directors of ESGEN and the board of managers of Sunergy have unanimously approved the Transaction. Completion of the proposed Transaction is subject to customary closing conditions and is anticipated to occur in the fourth quarter of 2023.

ESGEN is backed by Energy Spectrum, a well-known energy infrastructure investment firm with a track record of more than 25 years, $4.5 billion of total equity capital commitments, and nearly $2 billion of assets under management. The parties believe that the investment track record, operating experience, and strategic insight of Energy Spectrum will serve as a catalyst to enhance the value of the combined company while generating attractive risk-adjusted returns for its shareholders.

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