The residential solar market is a tough business. For as much as we discuss “product diversification” and the smart / all-electric home ecosystem of the future, the present is uncertain. Case in point: ADT Inc. announced it will be exiting its residential solar business, and refocusing on its core security and smart home business.
“The decision to exit solar operations was made after careful deliberation, and we expect this strategic action to drive substantial operational and financial benefits to ADT,” said ADT Chairman, President and CEO, Jim DeVries. “We want to acknowledge and thank our employees, partners, and customers as we work through this transition.”
ADT jumped into solar in 2021 by acquiring Sunpro Solar. The deal was for $160 million in cash plus approximately 77.8 million shares of ADT common stock, (a total enterprise value of approximately $825 million). Sunpro ranked among the top U.S. residential solar contractors at the time, and it seemed like a smart move for ADT.
Over the first nine months of 2023, ADT’s core business exhibited strong performance, while the solar business faced challenges, including operational difficulties and macroeconomic headwinds causing deterioration of conditions industrywide. As a result of these challenges, the solar segment generated an Adjusted EBITDA loss of $89 million during this period. Following the previously announced restructuring of its solar footprint and a detailed strategic review, ADT’s Board of Directors has approved the exit of this segment, which may include the transfer of components of the business to other parties.
The Company expects to incur certain one-time exit charges and cash expenditures with potential offsets from asset sales or reduced tax expenses. As previously disclosed, as of September 30, 2023, the goodwill balance for the Solar reporting unit was zero. At this time, the company is still analyzing the estimated net amount or range of amounts expected to be incurred in connection with this plan.
— Solar Builder magazine
[source: https://solarbuildermag.com/news/adt-exits-the-residential-solar-business/]
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