SunEdison Reaches Agreement With Vivint Solar To Modify Merger Agreement

(RTTNews) - SunEdison, Inc. (SUNE) and Vivint Solar, Inc. (VSLR) have reached an agreement to amend and modify the terms of the definitive merger agreement previously announced on July 20, 2015.

SunEdison also announced that 313 Acquisition LLC , the vehicle controlled by private equity funds managed by Blackstone (BX), has entered into a commitment to provide a $250 million credit facility to fund the ongoing growth of SunEdison. The merger is anticipated to close in the first quarter of 2016.

As per the terms of the amended merger agreement, Vivint Solar stockholders will receive merger consideration per share consisting of $7.89 per share in cash without interest, plus the number of shares of SunEdison common stock they would have received under the terms of the original deal (presently 0.120 shares of SunEdison common stock per share of Vivint Solar common stock based on the application of the collar), plus an additional number of shares of SunEdison common stock intended to have a value equal to $0.75, plus $3.30 in principal amount of SunEdison convertible notes (modified from the original deal to have a maturity of four years rather than five years).

This represents a reduction in the cash merger consideration to be received by Vivint Solar stockholders of $2.00 per share from the original deal and an increase in SunEdison common stock of $0.75 per share.

Under this option, the Public Stockholders would receive, for each share of Vivint Solar common stock, (i) $7.89 per share in cash and (ii) an additional cash amount representing the fair market value of the convertible note consideration and the stock consideration otherwise payable to the Public Stockholders in the merger as determined by Vivint Solar.

In contrast, 313 Acquisition would receive additional consideration consisting of all of the SunEdison common stock and SunEdison convertible notes that would otherwise have been payable to the Public Stockholders, and would bear a corresponding reduction in the aggregate amount of cash it receives as merger consideration equal to the amount of additional cash that will be paid to the Public Stockholders.

The number of shares of SunEdison common stock received by the Vivint Solar stockholders for each share of Vivint Solar common stock will consist of the number of shares of SunEdison common stock having a value determined under the original merger agreement, which based on the current trading price of the SunEdison common stock would be capped at 0.120 shares of SunEdison common stock per share of Vivint Solar common stock, and the number of additional shares having a value of $0.75 per share of Vivint Solar common stock based upon the volume weighted average price per share of SunEdison common stock (rounded down to the nearest cent) on the New York Stock Exchange for the five consecutive trading days ending on (and including) the second trading day immediately prior to completion of the merger.

As part of the merger consideration, Vivint Solar stockholders will also receive convertible notes that may be converted into shares of SunEdison common stock, which will be issued by SunEdison pursuant to an Indenture between SunEdison and a trustee. The convertible notes will be direct, unsecured, senior obligations of SunEdison. The initial conversion price for these convertible notes will be 140 percent of the Signing Measurement Price (as defined in the amended merger agreement, but the Signing Measurement Price for such purpose may not exceed $33.62 or be lower than $27.51).

Based on the current trading price of SunEdison common stock and given the application of such collar, such initial conversion price would be $38.51. The convertible notes will bear interest at a rate of 2.25% per year, payable semiannually in arrears in cash, and will have a maturity date that is four years from the date of issuance.

SunEdison has also entered into a letter agreement with TerraForm Power, pursuant to which SunEdison has agreed, among other things, to use its reasonable best efforts to sell to third-party purchasers (x) certain solar residential systems expected to be sold to TerraForm Power pursuant to a take/pay agreement to be entered into and (y) Purchased Subsidiaries to be acquired from Vivint Solar and expected to be sold to TerraForm Power pursuant to the Amended TERP Purchase Agreement, subject to certain conditions.

Upon the completion of a sale of any Purchased Subsidiary, if the closing of the transactions contemplated by the Merger Agreement has occurred, TerraForm Power will be relieved of its obligation to purchase the Purchased Subsidiaries that it has not otherwise purchased in connection with the closing and no purchase price will be paid with respect to such Purchased Subsidiaries.