Solar Financier Spruce Ends Goldman-Led Review, Names CEOBy
Chief Operating Officer Steve Olszewski promoted to CEO
Spruce selling loans that it will continue to service
Instead, the San Francisco-based company promoted two of its senior executives and has begun selling existing loans, leases and power purchase agreements to streamline operations and focus on profitability. It also raised $25 million in funding from existing lender HPS Investment Partners LLC.
“It made sense to transition from a place where we were holding assets on the books,” said Steve Olszewski, Spruce’s former chief operating officer who’s been appointed chief executive officer. The company expects to continue servicing loans that it sells, and still controls about $500 million of such assets.
The shift comes amid a turbulent time for the solar sector against a backdrop of slower growth and possible consolidation that’s seen Sungevity Inc. enter into bankruptcy and OneRoof Energy Group Inc. being wound down. Spruce, which offers financing for residential solar, water-conservation upgrades and energy-efficiency projects, made a number of unspecified layoffs this year. At the same time, the residential solar industry in the U.S. is projected to contract this year.
“It was a fair question amidst a consolidation period to wonder where does the pain end,” said Christian Fong, an independent director at the company who also sits on the board of SunEdison Inc. yieldco TerraForm Power Inc. “You watched the news around Sungevity and other names. It’s hard to peel back from who’s going to make it or who isn’t.”
Adam Buckfelder, vice president of finance, has taken over as chief financial officer at Spruce, which is backed by Kleiner Perkins Caufield & Byers LLC. Both Buckfelder and Olszewski worked at Clean Power Finance Inc., which merged with Kilowatt Financial LLC in 2015 to form Spruce.
Goldman Sachs was hired to help look at alternatives, according to the new CEO. “The strategic review led to the conclusion that the company actually had the leadership internally and existing capital partners to move forward,” Olszewski said.
A Goldman Sachs spokesman declined to comment.
Since 2012, the company and its forerunners have originated $1.2 billion. Spruce has about 70,000 customers, Olszewski said. It’s raised more than $2 billion from backers including Edison International, Dominion Energy Inc. and Duke Energy Corp.