- The stock price of Spartan Acquisition Corp. II (NYSE: SPRQ-UN) is trading at over 40% pre-market. This is why it happened.
The stock price of Spartan Acquisition Corp. II (SPRQ-UN) is trading at over 40% pre-market. Investors are responding to Sunlight Financial LLC — a premier U.S. residential solar financing platform — and Spartan Acquisition Corp. II (NYSE: SPRQ), a publicly-traded special purpose acquisition company sponsored by funds managed by an affiliate of Apollo Global Management, Inc. (NYSE: APO) (together with its consolidated subsidiaries) announcing that they have entered into a definitive agreement for a business combination that will result in Sunlight becoming a publicly listed company.
Upon the closing of the deal, the combined public company will be named Sunlight Financial Holdings. Sunlight Financial LLC will be the new public holding company’s sole operating subsidiary and Sunlight’s existing management team will continue to lead the business. Sunlight is a B2B2C fintech platform that provides residential solar contractors with seamless point-of-sale financing capabilities and delivers assets to capital providers.
Through its proprietary technology and deep contractor network, Sunlight offers instant credit decisions and affordable solar loans to homeowners nationwide. And Sunlight prides itself on creating value for all constituents it serves – solar contractors, capital providers, and consumers.
Residential solar is known as being a multibillion-dollar market at the forefront of the fast-growing clean energy industry. To date, Sunlight has funded over $3.5 billion of loans through its proprietary platform. And Sunlight’s underwriting has delivered the industry’s strongest-performing residential solar loans to its funding partners. And Sunlight has arranged financing for more than an estimated 100,000 residential solar systems, which will produce over 500 megawatts of solar-generated electricity and avoid more than 10 million metric tons of carbon dioxide emissions.
The deal reflects an estimated implied pro forma equity value at closing of $1.3 billion. And in connection with the transaction, investors led by Chamath Palihapitiya, Coatue, funds and accounts managed by BlackRock, Franklin Templeton and accounts advised by Neuberger Berman Investment Advisers LLC have committed to invest $250 million in a private purchase of Spartan’s Class A Common Stock at $10 per share immediately prior to the closing of the transaction.
Upon the closing of the deal, existing Sunlight equityholders are expected to own approximately 50% of the combined company, Spartan stockholders are expected to own approximately 26%, and PIPE participants are expected to own approximately 19%. The pro forma board will include nominees from existing Sunlight equityholders Tiger Infrastructure Partners and FTV Capital, nominees from Spartan, and independent directors to be nominated before closing.
KEY QUOTES:
“Sunlight partners with contractors and capital providers to accelerate the United States’ transition to a clean energy future. We are proud to have built a profitable, capital-light company that generates significant free cash flow and is poised for strong, sustainable growth. Our proprietary technology platform offers contractors robust tools to sell more solar systems and consumers a fast, fully-digital, and frictionless experience. Our risk management drives industry-low credit losses and results in strong risk-adjusted returns for capital providers. This, in turn, reduces our cost of capital and facilitates the deployment of financial products that help contractors grow.”
“I am grateful for the support of Sunlight’s major equityholders and the value they bring to our areas of core competence, and they will remain our largest shareholders following closing. Our original institutional equityholder, Tiger Infrastructure, is a growth-oriented infrastructure investor that brings a wealth of solar energy expertise. FTV Capital, our most recent equityholder, is a leading financial services growth investor, with a track record in specialty finance and scaling innovative, high-growth companies. Our team is thrilled to now team up with Spartan and Apollo. Apollo is one of the preeminent financial institutions in the world and shares our vision for a sustainable future. In strengthening our balance sheet and accessing Apollo’s strategic support through this business combination, we expect to continue to scale the Sunlight platform to sustain and accelerate both revenue and earnings growth, and further establish our business as the premier point-of-sale financing platform for residential solar contractors and customers.”
— Matt Potere, Chief Executive Officer of Sunlight
“Spartan and Apollo are committed to being ESG leaders. We are excited to team up with Sunlight to enable the energy transition by providing affordable, responsible financing for customers to own their residential solar systems. Matt and the Sunlight team have built an outstanding, proprietary fintech platform to pursue that mission. The business has substantial operating leverage, which well prepares Sunlight to grow and profit for years to come.”
— Geoffrey Strong, CEO of Spartan and Senior Partner, Co-head of Infrastructure and Natural Resources at Apollo
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.
