Dividend Solar Inc said June 23 it was merging with Figtree Financing. Financial terms weren’t announced but the deal includes a $200 million commitment from LL Funds. Figtree provides Property Assessed Clean Energy (PACE) financing for energy efficiency improvements, including solar energy. Figtree raised $30 million in financing in March led by LL Funds. Dividend Solar is a residential solar lender. Bryant Park Capital acted as financial advisor to Dividend Solar.
June 23, 2016 12:00 PM Eastern Daylight Time
SAN FRANCISCO–(BUSINESS WIRE)–Dividend Solar, Inc. (“Dividend Solar” or “Dividend”) and Figtree Financing (“Figtree”) announced a definitive merger agreement today, including a commitment of up to $200 million from LL Funds to fuel the growth of the combined entity. Dividend Solar is an innovative solar financing company whose loans include solar performance guarantees and warranty management for an easy path to solar ownership. Figtree is a leading provider of Property Assessed Clean Energy (PACE) financing for energy efficiency improvements, including solar energy. The merger represents the first ever combination of a residential solar lender and PACE financing provider.
“We are excited to announce our partnership with LL Funds and with Figtree, which will allow our company to expand its financing program to include PACE and to accelerate our nationwide growth,” says Eric White, Dividend Solar’s President. “We can now offer a suite of products to our customers, creating a ‘one-stop shop’ where commercial and residential property owners can secure the upfront financing they need for renewable energy and efficiency upgrades.”
Dividend Solar currently operates in 28 states through its network of quality-driven solar installation partners. The Company’s solar loan enables customers across the U.S. to enjoy hassle-free ownership, with a package including performance guarantees, system monitoring and warranty management. Dividend will now also offer PACE financing, which allows property owners to access long-term financing that is repaid through their property taxes and does not carry the personal or business credit requirements of traditional loans.
“PACE is a unique offering that enables energy projects at an affordable price for customers who might otherwise not have had access to longer term financing,” says Mahesh Shah, CEO of Figtree. “It is one of the fastest growing financing products in the space, and we are excited to be joining forces with Dividend Solar to launch a complete solution for all property owners.”
“The combination of Dividend and Figtree allows our combined company to bring industry-leading financing products to a much broader group of home and business owners for solar and energy efficiency,” says Steve Michella, CEO of Dividend Solar. “From day one, we have focused on providing homeowners with a better experience when going solar, and this partnership accelerates our reach to help more customers save money with renewable energy.”
LL Funds’ investment in Dividend Solar and Figtree – along with LL Funds’ commitment of additional capital to the combined company – is part of its commitment to the renewable energy space. LL Funds is a special situations investment manager that takes a deep quantitative approach and value-investment philosophy to target opportunities with asymmetric positive returns. The firm was founded in 2009 by Roberto Sella, former co-head of U.S. Fixed Income for Morgan Stanley’s Investment Management Division, and Fabio Terlevich, former Portfolio Manager of Morgan Stanley Alternative Investment Partners.
As part of the transaction, Shivraj (Raj) Mundy, Operating Partner with LL Funds, will join Dividend as its Executive Chairman. Mr. Mundy is a former McKinsey consultant and has over 17 years of consumer finance experience, including as President of Mass Affluent Cards at JPMorgan Chase and EVP, Head of Bankcards for HSBC USA. Dividend Solar and Figtree senior management will remain as senior operating executives.
“The two companies are a very complementary fit, and together can achieve traction in the marketplace faster than either could on its own. Dividend will now launch a residential PACE program shortly in California before expanding it into the Company’s broader footprint. Figtree’s experience in non-solar energy efficiency products presents an adjacent expansion opportunity for Dividend Solar. The merger also establishes product diversity that is not only more attractive for customers, but lessens reliance on factors beyond the Company’s control such as government and regulatory policy,” says Mundy. “LL Funds is the perfect partner – the principals are bringing their significant experience in specialty finance and capital markets to help us build a financing platform that can endure all market cycles.”
“The combination of Dividend Solar and Figtree, along with LL Funds’ credit experience and Raj’s career in regulated consumer finance, positions Dividend as the reliable, responsible lender to serve consumers, business owners and installation professionals alike,” says Roberto Sella, Managing Partner of LL Funds. “The addition of a PACE product to Dividend Solar’s technology platform allows homeowners and commercial property owners, who previously could not access low-cost financing, to lead the transition towards energy independence and save money without coming out of pocket upfront.”
Bryant Park Capital acted as financial advisor to Dividend Solar in this transaction.
About Dividend Solar
Dividend Solar offers $0-down loan financing which enables homeowners to maximize the benefits of going solar while also enjoying hassle-free performance guarantees and warranty management. Founded in 2013, the Company has led the shift towards the direct ownership model in solar with a focus on providing low-cost loan financing for creditworthy borrowers. Dividend Solar’s technology platform has streamlined the credit approval and installation process, thereby lowering the cost of installing solar panels and energy efficiency upgrades for its customers and installation partners. Learn more by visitingwww.dividendsolar.com.
About Figtree Financing
Figtree Financing provides innovative financing to accelerate the adoption of environmentally friendly products and services. The Company’s unique Property Assessed Clean Energy (PACE) financing provides property owners with funds to install energy efficiency, renewable energy and water conservation upgrades that is repaid on their property tax bills. Nationally, PACE has surpassed $1 Billion in funding in just five years, and is expected to double in 2016. Learn more by visitingwww.figtreefinancing.com.
About LL Funds
Founded in 2009, LL Funds, LLC is an independent investment manager focused on identifying opportunistic investments with substantial positive return asymmetry, focusing primarily on the mortgage market. Currently LL Funds manages $1.4 billion for endowments, foundations, individuals and family offices through multiple private-equity and fixed-income investment vehicles.