Item 8.01 Other Events.
On August 17, 2020, 313 Acquisition LLC ("313 Acquisition"), an affiliate of The
Blackstone Group Inc., entered into an agreement to sell an aggregate of
11,627,907 shares of common stock, par value $0.01 per share, of Vivint Solar,
Inc. ("Vivint Solar") to Coatue US 24 LLC ("Coatue"), a vehicle affiliated with
Coatue Management, L.L.C. (the "Resale"). On August 18, 2020, Vivint Solar and
Sunrun Inc. ("Sunrun") issued a joint press release announcing the Resale, a
copy of which is attached hereto as Exhibit 99.1 and incorporated by reference
herein.
Of the shares being sold in the Resale, 313 Acquisition is selling 8,706,976
shares pursuant to Vivint Solar's effective registration statements on Form S-3
(File Nos. 333-227014 and 333-248091), filed with the Securities and Exchange
Commission (the "Commission") on August 24, 2018 and August 17, 2020,
respectively, as well as the prospectus forming part of the registration
statements and a prospectus supplement filed with the Commission on August 19,
2020 (the "Public Resale"). A copy of the opinion of Wilson Sonsini Goodrich &
Rosati, Professional Corporation, relating to the legality of the shares sold in
the Public Resale is filed as Exhibit 5.1 hereto and incorporated by reference
herein.
Following the closing of the Resale, 313 Acquisition will hold approximately
46.1% of Vivint Solar's outstanding shares of common stock and, as a result,
Vivint Solar will no longer qualify as a "controlled company" within the meaning
of the New York Stock Exchange ("NYSE") corporate governance rules. Vivint Solar
intends to comply with the applicable NYSE corporate governance rules according
to the phase-in compliance period provided for in Section 303A.00 of the NYSE
Listed Company Manual.
In connection with the Resale, Sunrun and Coatue entered into a support
agreement (the "Coatue Support Agreement") pursuant to which Coatue agreed,
among other things, not to transfer any of its shares of Vivint Solar's common
stock, subject to certain exceptions including for certain permitted transfers,
and to vote the shares it acquired in the Resale in favor of, and against any
alternative proposal to, the adoption of the previously disclosed Agreement and
Plan of Merger (the "Merger Agreement"), dated as of July 6, 2020, by and among
Sunrun, Viking Merger Sub, Inc. ("Merger Sub"), a direct wholly owned subsidiary
of Sunrun, and Vivint Solar, pursuant to which, subject to the terms and
conditions set forth in the Merger Agreement, Merger Sub will merge with and
into Vivint Solar (the "Merger"), with Vivint Solar continuing as the surviving
corporation of the Merger as a direct wholly owned subsidiary of Sunrun. The
foregoing description of the Coatue Support Agreement does not purport to be
complete and is qualified in its entirety by reference to the Coatue Support
Agreement, which was filed as Exhibit 10.1 to Sunrun's Current Report on
Form 8-K filed with the Commission on August 18, 2020.
In connection with the Resale, Sunrun and 313 Acquisition also amended their
previous support agreement to reflect 313 Acquisition's beneficial ownership of
Vivint Solar's common stock following the Resale, which amendment does not
impact 313 Acquisition's obligations pursuant to the original support agreement,
including its obligations to vote its shares of Vivint Solar's common stock in
favor of the adoption of the Merger and against any alternative proposal.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
99.1 Joint Press Release of Vivint Solar, Inc. and Sunrun Inc., issued
August 18, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 including, but not limited to,
statements based upon or relating to Sunrun's and Vivint Solar's expectations or
predictions of future financial or business performance or conditions.
Forward-looking statements generally relate to future events or future financial
or operating performance. In some cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "would," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential," "will be,"
"will likely result" or "continue" or the negative of these words or other
similar terms or expressions that concern our expectations, strategy, plans or
intentions. Forward-looking statements may include, but are not limited to,
statements concerning the expected benefits of the transaction; cost synergies
and opportunities resulting from the transaction; Sunrun's leadership position
in the industry; the availability of rebates, tax credits and other financial
incentives including solar renewable energy certificates, or SRECs, and federal
and state incentives; regulations and policies related to net metering and
interconnection
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limits or caps and decreases to federal solar tax credits; determinations by the
Internal Revenue Service of the fair market value of Sunrun's and Vivint Solar's
solar energy systems; changes in regulations, tariffs and other trade barriers
and tax policy; the retail price of utility-generated electricity or electricity
from other energy sources; federal, state and local regulations and policies
governing the electric utility industry and developments or changes with respect
to such regulations and policies; the ability of Sunrun and Vivint Solar to
manage their supply chains (including the availability and price of solar panels
and other system components and raw materials) and distribution channels and the
impact of natural disasters and other events beyond their control; the ability
of Sunrun and Vivint Solar and their industry to manage recent and future
growth, product offering mix, and costs (including, but not limited to,
equipment costs) effectively, including attracting, training and retaining sales
personnel and solar energy system installers; Sunrun's and Vivint Solar's
strategic partnerships and expected benefits of such partnerships; the
sufficiency of Sunrun's and Vivint Solar's cash, investment fund commitments and
available borrowings to meet anticipated cash needs; the need and ability of
Sunrun and Vivint Solar to raise capital, refinance existing debt and finance
their respective obligations and solar energy systems from new and existing
investors; the potential impact of interest rates on Sunrun's and Vivint Solar's
interest expense; the course and outcome of litigation and investigations and
the ability of Sunrun and Vivint Solar to consummate the transactions
contemplated by the definitive transaction agreement in a timely manner or at
all. These statements are not guarantees of future performance; they reflect
Sunrun's and Vivint Solar's current views with respect to future events and are
based on assumptions and estimates and subject to known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements to be materially different from expectations or results projected
or implied by forward-looking statements. These risks include, but are not
limited to: the occurrence of any event, change or other circumstances that
could give rise to the termination of the definitive transaction agreement or
the failure to satisfy the closing conditions; the possibility that the
consummation of the proposed transactions is delayed or does not occur,
including the failure of the parties' stockholders to approve the proposed
transactions; uncertainty regarding the timing of the receipt of required
regulatory approvals for the Merger and the possibility that the parties may be
required to accept conditions that could reduce or eliminate the anticipated
benefits of the merger as a condition to obtaining regulatory approvals or that
the required regulatory approvals might not be obtained at all; the outcome of
any legal proceedings that have been or may be instituted against the parties or
others following announcement of the transactions contemplated by the definitive
transaction agreement; challenges, disruptions and costs of closing, integrating
and achieving anticipated synergies, or that such synergies will take longer to
realize than expected; risks that the Merger and other transactions contemplated
by the definitive transaction agreement disrupt current plans and operations
that may harm the parties' businesses; the amount of any costs, fees, expenses,
impairments and charges related to the Merger; uncertainty as to the effects of
the announcement or pendency of the Merger on the market price of the parties'
respective common stock and/or on their respective financial performance;
uncertainty as to the long-term value of Sunrun's and Vivint Solar's common
stock; the ability of Sunrun and Vivint Solar to raise capital from third
parties to grow their business; any rise in interest rates which would increase
the cost of capital; the ability to meet covenants in investment funds and debt
facilities; the potential inaccuracy of the assumptions employed in calculating
operating metrics; the failure of the energy industry to develop to the size or
at the rate Sunrun and Vivint Solar expect; and the inability of Sunrun and
Vivint Solar to finance their solar service offerings to customers on an
economically viable basis. These risks and uncertainties may be amplified by the
ongoing COVID-19 pandemic, which has caused significant economic uncertainty and
negative impacts on capital and credit markets. The extent to which
the COVID-19 pandemic impacts Sunrun's and Vivint Solar's businesses,
operations, and financial results, including the duration and magnitude of such
effects, will depend on numerous factors, many of which are unpredictable,
including, but not limited to, the duration and spread of the pandemic, its
severity, the actions to contain the pandemic or treat its impact, and how
quickly and to what extent normal economic and operating conditions can resume.
Any financial projections in this filing are forward-looking statements that are
based on assumptions that are inherently subject to significant uncertainties
and contingencies, many of which are beyond Sunrun's and Vivint Solar's control.
While all projections are necessarily speculative, Sunrun and Vivint Solar
believe that the preparation of prospective financial information involves
increasingly higher levels of uncertainty the further out the projection extends
from the date of preparation. The assumptions and estimates underlying the
projected results are inherently uncertain and are subject to a wide variety of
significant business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those contained in the
projections. The inclusion of projections in this filing should not be regarded
as an indication that Sunrun and Vivint Solar, or their representatives,
considered or consider the projections to be a reliable prediction of future
events.
Annualized, pro forma, projected and estimated numbers are used for illustrative
purpose only, are not forecasts and may not reflect actual results.
The foregoing review of important factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary statements that are
included herein and elsewhere, including the risk factors included in Sunrun's
registration statement on
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Form S-4, filed with the Commission on August 14, 2020 and Sunrun's and Vivint
Solar's most recent reports on Form 10-K, Form 10-Q, Form 8-K and other
documents on file with the SEC. These forward-looking statements represent
estimates and assumptions only as of the date made. Unless required by federal
securities laws, Sunrun and Vivint Solar assume no obligation to update any of
these forward-looking statements, or to update the reasons actual results could
differ materially from those anticipated, to reflect circumstances or events
that occur after the statements are made. Given these uncertainties, investors
should not place undue reliance on these forward-looking statements. Investors
should read this document with the understanding that Sunrun's and Vivint
Solar's actual future results may be materially different from what Sunrun and
Vivint Solar expect. Sunrun and Vivint Solar qualify all of their
forward-looking statements by these cautionary statements.
Additional Information and Where to Find It
In connection with the Merger, on August 14, 2020, Sunrun filed with the SEC a
registration statement on Form S-4 (Registration No. 333-246371) (the
"registration statement"), which included a document that serves as a prospectus
of Sunrun and a joint proxy statement of Sunrun and Vivint Solar (the "joint
proxy statement/prospectus"). These materials have not yet been declared
effective, are not yet final and may be amended. After the registration
statement has been declared effective by the SEC, the joint proxy
statement/prospectus will be delivered to stockholders of Sunrun and Vivint
Solar. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, SECURITY HOLDERS OF
SUNRUN AND VIVINT SOLAR ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT
PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO)
AND OTHER DOCUMENTS RELATING TO THE MERGER FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. Investors and security holders will be able to obtain copies of
the registration statement, joint proxy statement/prospectus and other documents
filed by Sunrun and Vivint Solar with the SEC, without charge, through the
website maintained by the SEC at http://www.sec.gov. Copies of documents filed
with the SEC by Sunrun will be made available free of charge on Sunrun's website
at http://investors.sunrun.com/ under the heading "Filings & Financials" and
then under the subheading "SEC Filings." Copies of documents filed with the SEC
by Vivint Solar will be made available free of charge on Vivint Solar's website
at http://investors.vivintsolar.com/ under the link "Financial Information" and
then under the heading "SEC Filings."
Participants in the Solicitation
Sunrun and Vivint Solar and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the holders
of Sunrun common stock and Vivint Solar common stock in respect of the proposed
transaction. Information about Sunrun's directors and executive officers is set
forth in Sunrun's Form 10-K for the year ended December 31, 2019 and the proxy
statement for Sunrun's 2020 Annual Meeting of Stockholders, which were filed
with the SEC on February 27, 2020 and April 17, 2020, respectively. Information
about Vivint Solar's directors and executive officers is set forth in Vivint
Solar's Form 10-K for the year ended December 31, 2019 and the proxy statement
for Vivint Solar's 2020 Annual Meeting of Stockholders, which were filed with
the SEC on March 10, 2020 and April 24, 2020, respectively. Stockholders may
obtain additional information regarding the interests of such participants by
reading the registration statement and the joint proxy statement/prospectus and
other relevant materials filed with the SEC regarding the Merger when they
become available. Investors should read the registration statement and the joint
proxy statement/prospectus carefully before making any voting or investment
decisions.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended.
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