SolarCity Corp. (SCTY), the rooftop-solar power provider that’s quadrupled in value since its December initial public offering, agreed to buy closely held Zep Solar Inc. for about $158 million in stock to ensure supplies of racking systems that cut installation times in half.
Zep is one of the company’s largest suppliers of rooftop mounting equipment and holds patents for designs that help lower installation costs, San Mateo, California-based SolarCity said today in a statement.
It’s the second acquisition for SolarCity Chief Executive Officer Lyndon Rive since the company raised $92 million in its IPO. The company purchased in September the direct marketing provider Paramount Energy Solutions for about $120 million in cash and stock. Zep’s racking systems will help installers complete jobs faster, according to Rive.
“Without Zep it would take us two to three days to install a typical rooftop,” Rive said in an interview. “With it we’re down to a single day and it looks better on the roof.”
The two acquisitions will help reduce costs of rooftop solar systems and meet Rive’s goal of reaching 1 million customers, or 6,000 megawatts installed, in five years.
Zep will honor its existing supply contracts with other solar installers, and after that SolarCity expects to utilize most of the company’s output, Rive said.
SolarCity also plans to expand sales and marketing of Zep systems in Japan, Australia and Europe, Rive said. He expects to close the transaction in December.
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