Real Goods Solar, an alternative energy pioneer that got its start in Mendocino County, said Wednesday it is acquiring a Connecticut solar company in an effort to expand its role in a fast-growing industry.
Real Goods, a specialist in residential solar systems, will acquire Alteris Renewables of Wilton, Conn., a company known for its commercial solar installations.
"It makes us become a full-fledged national company," said John Schaeffer, Real Goods' founder and president.
As part of the agreement, Real Goods will issue at least 8 million shares of common stock to Alteris shareholders. Based on current share prices, the acquisition could be valued at roughly $20 million. Real Goods stock closed Wednesday at $2.68, up 20 cents on the Nasdaq exchange.
Real Goods estimates its sales will approach $200 million in the 12 months after the acquisition. In the first quarter of this year, the company reported $17 million in revenues.
Its majority owner, healthy living retailer Gaiam, has indicated it will vote to approve the acquisition, which is expected to be completed within the next three months.
Real Goods began in Willits in 1978 and lays claim to selling the first solar panel in the United States. Schaeffer sold the eco-retailer in 2000 to Gaiam. As part of a plan to grow through acquisitions, Real Goods went public in 2008 and issued $55 million worth of stock. It is now based in Louisville, Colo., although it maintains regional offices in Cloverdale and San Rafael.
Along with the acquisition, Real Goods announced Wednesday that its has hired a new CEO, Bill Yearsley, once an executive director of former British building materials company Redland PLC. Yearsley helped finalize the terms of the Alteris acquisition and has completed more than 40 similar transactions, according to Real Goods.
Under the new structure, Schaeffer will become president of the company's residential division and will continue to operate out of his Hopland office. Alteris' head of commercial, Ron French, will become president of the commercial division.
Shayle Kann, managing director for solar at GTM Research in Boston, said mergers and acquisitions represent a key trend in the solar industry.
"It's becoming more important to have a nationwide presence, or a presence at least across many states," Kann said.
His firm estimates the solar industry will double the pace of installations to 1.8 gigawatts in 2011, up from 887 megawatts last year. Part of that growth is due to lower system costs and part to new financing approaches that allow homeowners to go solar for no money down.
Seven states in the West and Northeast installed 88 percent of all new U.S. solar systems in the first quarter of the year, according to a recent GTM report. California ranked first in that list.
Real Goods is the second-biggest solar installer in the Golden State in an era of striking consolidation, Schaeffer said. Two years ago, the state had about 1,000 solar companies. Today, the number is closer to 500.
The U.S. solar market is projected to grow fivefold from 2010 to 2015, he said.
"Solar is just busting loose all over the place," he said.
Editor's Note: An earlier version of this story incorrectly said the predecessor to Real Goods Solar got its start in Hopland. The company began in 1978 in Willits.
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