Sunedison Inc (NYSE:SUNE) has announced entering into a definitive agreement with Vivint Solar Inc (NYSE:VSLR) for the acquisition of the latter for $2.2 billion. Vivint Solar is known for offering solar panel installations, with the second-biggest consumer base in the U.S. One of the primary reasons for the heightening demand of their solar panels is their lease-based installation service, which keeps the installation cost lower for customers. Sunedison Inc (NYSE:SUNE) will pay $2.2 billion in a combination of cash, shares of the company, and convertible notes. As a part of the overall deal, TerraForm Power Inc (NASDAQ:TERP) will acquire the rooftop solar portfolio of Vivint Solar Inc (NYSE:VSLR) for $922 million concurrently with the acquisition of the latter by Sunedison Inc (NYSE:SUNE). While discussing the acquisition, Ahmad Chatlia, CEO of Sunedison Inc and chairman of TerraForm Power, said, “SunEdison’s acquisition of Vivint Solar is a logical next step in the transformation of our platform after the successful execution of our First Wind acquisition in January 2015.” He further added, “We expect the Vivint Solar transaction to create significant value for our stockholders through the accretion in our TerraForm Power ownership, the acceleration of our Incentive Distribution Rights and an immediate expansion of our capacity and bandwidth to grow our residential business in the U.S. and globally.”
The shares of Vivint Solar Inc (NYSE:VSLR) are trading 44.63% higher today, pushing their year-to-date growth to 70.72%. Smart money was either expecting a similar transaction or heightened performance by the company, as the aggregate investments in the solar company by the smart money tracked by Insider Monkey rose sharply in the first quarter, to $82.26 million from positions held by 14 hedge fund investors compared to $49.73 million of shares held by nine investors one quarter earlier. Shares were up by over 31% during the quarter, though this doesn’t account for the entirety of increase in aggregate value, meaning funds collectively bought shares.
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In terms of insider trading, which we also monitor closely, Shawn Lindquist, Chief Legal Officer, Executive Vice President and Secretary at Vivint Solar Inc, sold 55,148 shares of the company on June 2.
For an in-depth understanding of the hedge fund sentiment surrounding Vivint Solar, let’s take a detailed look at the action surrounding the company.
What does Smart Money think about Vivint Solar Inc (NYSE:VSLR)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of five from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds tracked at Insider Monkey, Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors had the largest investment in the company. The investment manager had 3.21 million shares of the company in its portfolio with a market value of $38.93 million. Bernard Lambilliotte’s Ecofin Ltd was among the other primary shareholders of the company with ownership of 1.06 million shares valued at $12.83 million. Hedge fund managers like Ken Griffin of Citadel Investment Management had a somewhat different opinion, as in his case, he dropped 51% of his stake in the company by the end of the first quarter, with a remaining investment of $14.02 million in 1.16 million shares.