XL Fleet Corp. announced the acquisition of Spruce Power, the largest privately held owner and operator of residential rooftop solar systems in the U.S. with more than 52,000 subscribers. In connection with the acquisition of Spruce Power, XL Fleet also unveiled its new corporate strategy to provide subscription-based solutions for rooftop solar, battery storage, EV charging and other distributed energy resources.
On September 9, 2022 after market close, XL Fleet completed the acquisition of the Spruce Power business from funds managed by HPS Investment Partners for total cash consideration of approximately $58 million and the assumption of approximately $542 million of debt. The Board of Directors of XL Fleet unanimously approved the transaction.
Spruce Power owns and operates more than 52,000 residential rooftop solar systems. The company sells the power generated by its systems to homeowners pursuant to long-term agreements that obligate the company’s subscribers to make recurring monthly payments. Spruce Power’s operational headquarters are in Houston, Texas and the company had approximately 110 full time employees as of September 1, 2022.
Spruce Power’s revenues have more than doubled since 2019, driven primarily by the acquisition of 10 rooftop solar portfolios. The company does not have a salesforce or installation technicians. Spruce Power has grown by acquiring portfolios of residential solar systems from other companies and investors rather than selling individual systems to homeowners through a direct-to-consumer salesforce like many of its competitors. This approach has allowed the company to keep its customer acquisition costs low.
“Earlier this year, we communicated our intent to transform the company and create shareholder value through strategic M&A,” said Eric Tech, CEO of XL Fleet. “The acquisition of Spruce Power is a critical first step in that transformation and will be the cornerstone of our new strategy to provide subscription-based solutions for rooftop solar, battery storage and EV charging to homeowners and small businesses.”
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