US distributed solar supplier has acquired a portfolio of over 2,400 residential solar systems and contracts in the US.
The company said the acquired portfolio consists of residential solar systems located in California, New Jersey, and Massachusetts, with an average remaining contract life of nearly 11 years. Prior to the acquisition, Spruce was the third-party services solution provider for the portfolio which allows the company to integrate the acquired portfolio into its existing portfolio of home solar assets and contracts.
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The portfolio is expected to generate about US$4 million of annual revenue.
However, Spruce Power did not disclose the identity of the buyer, only saying that it acquired the portfolio from a publicly traded and regulated utility company for US$20.9 million.
After the acquisition, Spruce’s total portfolio will grow to over 75,000 home solar assets and contracts, claiming that its portfolio had grown by about 50% in less than a year since its transition into a pure-play owner and operator of residential rooftop solar assets in 2022.
“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 with an attractive return on capital and represents continued execution of our growth strategy that enables such low customer acquisition cost,” said Christian Fong, Spruce’s chief executive officer.
Previously, the company said it would use its increased financial flexibility “in a disciplined manner to further enhance shareholder value”, be it through buying high quality portfolios of residential solar assets, through the repurchase of shares under its share repurchase programme, or through additional debt reduction.
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