ADT to Expand Residential Footprint
ADT Inc. has announced an agreement to acquire Sunpro Solar (Sunpro), ranked #2 for 2021 Top Residential Rooftop Solar Contractors in the United States, for $160 million in cash plus approximately 77.8 million shares of ADT common stock, implying a total enterprise value of approximately $825 million, subject to certain adjustments. ADT will rebrand Sunpro to “ADT SolarTM” and enter the rooftop solar business to offer ADT customers a protected, connected and now powered home.
“With its strong focus on the customer, Sunpro is the perfect partner for ADT and a logical extension of our ecosystem, unlocking an integrated home experience that includes security, automation, and energy management,” said Jim DeVries, ADT president and CEO. “By combining a cash-flow-positive company in the high-growth solar space with ADT’s trusted brand, national footprint, and cross-sell potential, we can expand offerings to our customers and accelerate growth for both ADT and ADT Solar.
“We’re excited to offer consumers even more peace of mind by giving them the opportunity to power their homes with sustainable and affordable solar energy. Residential solar represents a $15 billion annual market, but still only in 3 percent of all U.S. homes,” DeVries said. “With more than 6 million ADT customers and our best-in-class sales force and marketing channels, we will be well-positioned to further scale ADT Solar while lowering customer acquisition costs and accelerating overall solar adoption. We believe we have the potential to grow ADT Solar into a multi-billion-dollar business over time as we meaningfully increase the accessibility and penetration of residential solar across America.”
Founded in 2008, Sunpro is a leading provider of rooftop solar systems in the United States. Sunpro markets, designs, sells, installs and maintains solar power systems on residential and commercial properties through their 3,600-person, full-time workforce of solar energy professionals with 56 locations in 22 states. The company has been growing quickly, with a 90 percent year-over-year increase in installs in 2020 and has a cash-flow-positive, asset-light business model with more than four consecutive years of positive EBITDA. The transaction price represents 10x estimated standalone next 12 months’ EBITDA.
The cash portion of the proceeds are expected to be used for debt reduction and sellers’ taxes. Nearly all of the sellers’ consideration is in ADT stock, reflecting their conviction in ADT’s future growth.
Sunpro founder Marc Jones and the Sunpro management team are expected to join ADT to help build ADT Solar into the U.S. rooftop solar industry leader.