Colorado’s Real Goods Solar is expanding its nationwide network of solar installers with the purchase of Mercury Energy, which does business as Mercury Solar Systems. The merger will enhance Real Goods network of installers in the Northeast.
The merger could be a sign that the installer side of the solar industry is also starting to consolidate as some of the manufacturers have in recent past to avoid bankruptcy or other reorganization. However, Mercury is not in debt, according to Real Goods Solar. Its current assets include $10 million in cash and no debt.
"This transaction brings together two of the country's highly respected and experienced solar companies, creating a very strong and talented team to increase our market reach and our overall depth and breadth of capabilities," said Kam Mofid, CEO of Real Goods Solar. "This acquisition significantly expands our presence as a major solar solutions provider in key solar markets across the East Coast. As an added benefit, it also strengthens our balance sheet with additional working capital that we expect to use to further accelerate growth in key markets across the country."
Real Goods has a long history of installing solar including selling some of the first publicly available photovoltaic modules in the U.S. in 1978. Since then the company has installed more than 100 megawatts of solar in more than 15,000 installations, according to the company. For its part, Mercury Energy was formed in 2008 and has already installed more than 50 megawatts of solar projects generating more than $250 million in revenue, $35 million of which happened in 2012. Mercury's assets include approximately $10 million of cash, and it has no debt. After the transaction closes, the cash balance will be available to Real Goods Solar for general corporate purposes and to accelerate the growth of the combined business.
Under the agreement, which hasn’t closed yet, Real Goods Solar said it will issue 7.9 million shares of its class A common stock for the acquisition. Depending on share price and closing, the stock issuance could change. Also, “The transaction is subject to the approval of the shareholders of each of Real Goods Solar and Mercury. A representative of Mercury's current board will be nominated to join Real Goods Solar's board of directors,” Real Goods Solar said.
When the deal closes, more than 50 Mercury employees, including three executives will join Real Goods Solar. Mercury President Jared Haines will serve as vice president of sales for the Northeast. Mercury Co-founder Anthony Coschigano will serve as vice president of Northeast Operations at Real Goods Solar and Mercury Chief Financial Officer and Chief Operations Officer Andrew Zaref will become vice president of Project Finance.