XL Fleet in Wixom Purchases Texas Rooftop Solar Firm for $58M

XL Fleet Corp., a commercial fleet electrification company in Wixom, has acquired Spruce Power, a Houston, Texas-based privately held owner and operator of residential rooftop solar systems, for $58 million.
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XL Fleet Corp. in Wixom has acquired Spruce Power in Texas for $58 million. // Stock Photo
XL Fleet Corp. in Wixom has acquired Spruce Power in Texas for $58 million. // Stock Photo

XL Fleet Corp., a commercial fleet electrification company in Wixom, has acquired Spruce Power, a Houston, Texas-based privately held owner and operator of residential rooftop solar systems, for $58 million.

The acquisition, which includes the assumption of approximately $542 million of debt, marks a new corporate strategy for XL Fleet to provide subscription-based solutions for rooftop solar, battery storage, EV charging, and other distributed energy resources.

“Earlier this year, we communicated our intent to transform the company and create shareholder value through strategic M&A,” says 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.”

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. The company had approximately 110 full time employees as of Sept. 1.

“Demand for distributed generation and electric vehicles continues to grow as consumers and businesses seek to mitigate the impact of rising energy costs and become more sustainable,” Tech says. “Subscription-based services that make it easy for homeowners and small businesses to own and maintain rooftop solar, battery storage and electric vehicle charging systems are in high demand.

“The subscription model allows consumers access to new technology without making a significant upfront investment or incurring maintenance costs, while enabling the service provider to earn recurring revenues over a long period of time and generate attractive returns on capital. Spruce Power is a longstanding leader in providing solar-as-a-service solutions and is playing a major role in helping consumers to reduce their energy costs and make meaningful contributions to decarbonizing the electricity grid.”

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.

“The Spruce team is incredibly excited about joining the XL Fleet platform and motivated by the potential value created by combining our two companies,” says Christian Fong, CEO of Spruce Power and newly appointed president of XL Fleet. “With XL Fleet’s resources, we now have the tools to significantly accelerate the growth in our business, while continuing to execute on our mission to lower the cost of energy for our customers and create a more sustainable future.”

In parallel with the acquisition of Spruce Power and the company’s new corporate strategy, XL Fleet’s board of directors recently initiated a comprehensive review of strategic alternatives for XL Fleet’s Drivetrain segment with the goal of maximizing shareholder value and streamlining the company’s operations. XL Fleet expects to complete the review by the end of 2022.

Also in connection with the acquisition of Spruce Power and implementation of the company’s new corporate strategy, XL Fleet intends to change its corporate name and introduce a new brand identity. The company’s new name will reflect its focus on providing subscription-based solutions for rooftop solar, energy storage, EV charging and other energy-related products to homeowners and small businesses.

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