Spruce Power Acquires Portfolio Of 2,400 Residential Solar Systems And Contracts For $20.9M

Spruce Power Holding Corp SPRU has acquired a portfolio of over 2,400 residential solar systems and contracts from a publicly traded, regulated utility company for $20.9 million. 

The acquired portfolio consists of residential solar systems in California, New Jersey, and Massachusetts, with an average remaining contract life of nearly 11 years. It is expected to generate about $4 million of annual run-rate revenue. 

Since the company's transformation into a pure-play owner and operator of residential rooftop solar assets in 2022, Spruce's entire portfolio has increased to over 75,000 home solar assets and contracts, representing approximately 50% growth in less than a year.

Spruce funded the acquisition purchase price from the concurrent upsizing of its Spruce Power 2 credit facility.

SPCU held $192.1 million cash as of June 30, 2023.

"With Spruce already providing comprehensive servicing solutions to this acquired portfolio, our team is very familiar with the portfolio and its strong operating history and financial performance. This investment will provide Spruce an attractive return on capital and represents continued execution of our growth strategy that enables such low customer acquisition cost," commented Christian Fong, Spruce's Chief Executive Officer.

Spruce's Chief Financial Officer Sarah Wells added, "With this acquisition, our financial outlook continues to improve, and we are tightening our expectation for annual run-rate business cash inflows to between $120 million and $130 million."

Price Action: SPRU shares closed lower by 3.14% at $0.77 on Friday.