Roseville's Paramount Solar is on the verge of being sold to a prime player in the sometimes rough-and-tumble solar energy industry.
San Mateo-based SolarCity Corp. announced Tuesday that it has a definitive agreement to acquire Paramount Solar in a transaction valued at about $120 million.
SolarCity's agreement is with Paramount Equity, of which Paramount Solar is a division. Paramount Solar does solar sales and marketing and bills itself as one of the largest residential solar companies in California.
Under the terms of the agreement, SolarCity will buy Paramount Solar for $116.3 million in stock and the remainder in cash.
Paramount, which employs about 150 people in offices in Roseville and Granite Bay, will retain its local offices but do business under the SolarCity name.
Paramount Equity CEO Hayes Barnard will join SolarCity as chief revenue officer in charge of the company's sales and marketing organizations upon the formal closing of the acquisition.
Paramount Solar is majority-owned by Santa Monica-based Guthy-Renker LLC, a large direct marketing company probably best known for the marketing of its Proactiv Solution skin-care products. In connection with the acquisition, Ben Van de Bunt, longtime CEO of Guthy-Renker, is expected to join SolarCity's board of directors later this year, subject to nomination procedures and board approval.
SolarCity leases and installs solar energy systems for homes and businesses. The San Mateo firm is known for its rooftop systems, which it will lease to customers on a monthly basis, allowing them to avoid hefty upfront costs.
While some firms have struggled or fallen by the wayside in the solar industry where material and startup costs tend to run high SolarCity has made news of a different kind.
In December, the company commenced an initial public offering of 11.5 million shares of common stock priced at $8 per share. Shares took flight from there, topping $52 at one point. In after-hours trading Tuesday on Nasdaq, shares of SolarCity fell 17 cents to $37.75 a possible reaction to anticipated costs related to the Paramount acquisition.
SolarCity has had a working relationship with Paramount Solar for more than a year. SolarCity currently serves customers in 14 states and bills itself as the nation's top full-service solar provider, with more than 3,300 employees and nearly 70,000 customers.
With the addition of Paramount Solar's direct marketing and sales skills, SolarCity has set a goal of reaching 1 million customers over five years.
SolarCity CEO Lyndon Rive said, "Barnard and Guthy-Renker have built what I strongly believe to be the best virtual sales organization in the solar industry, with an extraordinary ability to acquire customers at a low cost."
"We are incredibly proud of this accomplishment and feel that it is the perfect time to join forces with SolarCity, to offer more customers the ability to take control of their energy costs by producing clean, renewable energy," Barnard said. "Together, we'll develop the most sophisticated customer acquisition and installation system in the industry to provide 1 million customers with residential solar systems, forever changing the way energy is consumed, and at a lower cost."
Both Rive and Barnard said they expect the announced deal to ultimately produce more jobs locally, although they declined to estimate specific numbers.
Officials expect the transaction to be completed in September, subject to various conditions and approvals.
Following the completion of the acquisition, Paramount Equity Mortgage LLC, Value360 LLC and Ironstone Insurance LLC, the remaining divisions of Paramount Equity, will continue to operate as independent companies.
Call The Bee's Mark Glover, (916) 321-1184.