SunPower aims to become powerful by strengthening its presence in the residential market

SunPower Corporation (NASDAQ: SPWR) announced that the group would acquire the residential solar provider Blue Raven. The company aims at strengthening its presence in the residential solar sector. The corporate house is reworking on its strategies to capitalize on the residential solar market, which is booming. Additionally, the group will sell its industrial and commercial business wings.

Here’s why acquiring Blue Raven is important for SunPower

The CEO of SunPower, Peter Faricy, stated that taking over Blue Raven was beneficial for many-a-reasons. More than 90% of customers of Blue Raven are located in 14 states, which accounts for only 5% of SunPower’s sales. The acquisition is an opportunity for the group to gain market share.

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More than 20,000 Blue Raven customers will be SunPower’s clients post the takeover. The transaction is valued at $165 million, of which $145 million is the cash needed to seal the deal. A majority of the money was raised with the sale of 1 million shares of Enphase Energy.

SunPower to focus on the residential solar sector

In a bid to streamline its business, the CEO of SunPower stated that the group would focus on the residential solar sector. However, Faricy added that the commercial and industrial solar segment is attractive, promising growth ahead. In addition, the CEO shared that the corporate house keeps the cash registers ringing with a few contracts in the commercial and industrial, an opportunity that will work in favor of the new owner.

Furthermore, SunPower will use the money earned from the sale of its commercial and industrial wing to fuel its residential business, including acquiring new customers and expanding the services offered by the group.

The CEO of SunPower, Peter Faricy, said:

“In our case, we’re happy to have the clarity for investors on this singularly focused strategy now, focusing on residential moving forward.”

In 2020, the group earned $848 million from residential and light commercial sales, and $254.8 million was income earned from the commercial and industrial divisions. Shares of SunPower spiked over 6% in the past month. Post the news of SunPower being added to the S&P MidCap 400, ahead of the opening bell on Tuesday, the share recorded close to a 10% spike last Friday.