Solar Alliance acquires Solar Project Pipeline from LA Solar Company
Solar Alliance Energy announced that it has signed definitive agreement acquisition of a pipeline of residential solar projects from a U.S. solar company (Seller) based in Los Angeles, California.
The Definitive Agreement follows the accelerated transition of the Seller’s sales team to Solar Alliance announced on April 12, 2017 and completes the transaction described in the Company’s letter of intent first announced on April 4, 2017. The expanded sales team, responsible for more than 7 MW of residential solar systems sales and revenue of more than US$34,305,000 (unaudited) in 2016, has been hired by the Company and has already started selling Solar Alliance residential solar systems to Los Angeles homeowners.
Solar Alliance Chairman and CEO Jason Bak said that this transaction expands the Solar Alliance brand into the Los Angeles area and fits perfectly with our growth strategy. The assumption of these service contracts for residential solar systems will increase their revenue in the short term. More importantly, the high-performance sales team that has already joined Solar Alliance will drive increased revenues long term and expand their geographic diversification beyond San Diego.
Solar Alliance will pay up to US$2,000,000 in contingent payments, subject to the following payment waterfall:
- Prior to any payment to the Seller, Solar Alliance will be repaid any working capital injected by Solar Alliance, plus an agreed upon return on that capital;
- Once the working capital and working capital return have been paid to Solar Alliance, Solar Alliance will then receive all profit from the Seller up to a 6% net profit threshold;
- For profit in excess of the 6% net profit threshold, 50% will be paid to the Seller until such time as the US$2,000,000 contingent payment is fulfilled. 50% of profits above the 6% net profit threshold will be paid to Solar Alliance;
- There is also a provision for an additional US$2,000,000 contingent payment to the Seller, subject to the same waterfall described above, if revenue from the Seller exceeds US$50,000,000 in any fiscal year.