All-Stock Transaction Provides Scale and
Operating Efficiencies to Accelerate Revenue Growth and Margin
Expansion
Conference Call Scheduled for Today at 5:30
p.m. ET
The Peck Company Holdings, Inc. (NASDAQ: PECK) ( “Peck”), a
leading commercial solar engineering, procurement and construction
(EPC) company and Sunworks, Inc. (NASDAQ: SUNW) (“Sunworks”), a
provider of solar power solutions for agriculture, commercial and
industrial (“ACI”), public works and residential markets, today
announced that they have entered into a definitive agreement under
which Peck will acquire Sunworks in an all-stock transaction,
pursuant to which each share of Sunworks common stock will be
exchanged for 0.185171 shares of Peck common stock (subject to
certain adjustments). Assuming no adjustments, Sunworks’
stockholders would receive an aggregate of approximately 3,079,207
shares of Peck common stock, representing approximately 36.54% of
Peck common stock outstanding after the merger.
Merger Rationale and Highlights
- Combination creates a national leader with a coast-to-coast
presence poised to capitalize on significant cost synergies.
- Improves scale and strengthens national presence, with pro
forma revenue of $88 million if the companies had been combined in
2019, and a combined backlog of $76.8 million if the companies had
been combined as of June 30, 2020.
- Management has identified approximately $6 million in
anticipated annualized cost synergies, including supply chain
management leverage, redundant public company costs and various
operating expenses.
- The transaction is expected to be accretive to earnings and
free cash flow after integration synergies have been
implemented.
- Combined company will have significantly expanded addressable
market to leverage Sunworks’ core capabilities in agriculture and
public works.
- Combination leverages Peck’s strategic partnership with
GreenBond Advisors to provide project development and financing to
fuel growth and solar project ownership improving the conversion of
Sunworks’ pipeline and expanding its addressable market.
- Peck and Sunworks installed a combined 62,973kW in 2019, which
would rank 41st overall and would be the 16th largest EPC
contractor based on the latest Sun Power World ranking list.
Management Commentary
Jeffrey Peck, Chairman of the Board and Chief Executive Officer
of Peck, commented, “This is a transformational combination,
leveraging the respective strengths of the two organizations and
creating a national leader in the fast-growing and resilient solar
energy industry. It provides Peck expansion, scale, an enhanced
financial profile and a stronger platform from which we can
continue to build more solar projects. Our integration with
Sunworks will extend our presence to the west coast and broaden our
offerings to agriculture and public works. The transaction
solidifies our three-pronged growth strategy that we announced a
year ago when we listed on Nasdaq through a SPAC merger. Since we
have been public, we (1) delivered organic growth of revenue from
$16 million to $28 million in the first year, (2) partnered with
GreenBond Advisors to access capital that provides EPC revenue as
well as asset ownership in the solar projects we build for the
partnership, and now (3) we are delivering on the third prong of
our strategy with an exciting accretive acquisition. We have been
focused on executing these important initiatives for our
shareholders and expect the acquisition of Sunworks to provide many
more opportunities for long term growth and profitability.”
Chuck Cargile, Chairman of the Board and Chief Executive Officer
of Sunworks, added, “By joining with Peck, our vision for spreading
clean solar energy throughout the U.S. is amplified and expanded.
Peck has demonstrated the ability to grow revenue and maintain
profitability, and we believe that the combination of our teams,
customers, projects and partners will materially accelerate revenue
growth and earnings. Peck’s strong partnership with GreenBond
Advisors will allow us to offer financing to a broader range of
customers and increase our addressable market. Additionally, our
expanded scale will enable us to source solar panels and equipment
through Peck’s established relationships at lower costs, benefiting
our profit margins. Being part of Peck’s platform is exciting, and
in the best interest of Sunworks shareholders, customers, business
partners and employees.”
Transaction Details
The transaction is expected to close during the fourth quarter
of 2020, subject to approval by shareholders of both companies and
other customary closing conditions.
The Board of Directors of Peck and Sunworks have each
unanimously voted in favor of the definitive transaction
agreement.
As part of the agreement, after the transaction closes, Jeff
Peck will continue as Chairman of the Board and Chief Executive
Officer of the combined company. The Board of Directors of the
combined company will be comprised of four members of the Peck
Board of Directors and three members appointed by the Sunworks
Board of Directors. Because the combined company will be in
competition with SunPower Corporation in some markets, Doug Rose,
who is also a Vice President at SunPower Corporation, has resigned
from the Board of Directors of Peck to avoid conflicts of
interests.
Roth Capital will be acting as financial advisor to Peck and
Merritt and Merritt is serving as its legal counsel.
Holthouse Carlin & Van Trigt LLP is acting as financial
advisor to Sunworks and Stradling Yocca Carlson & Rauth, P.C.
is acting as its legal counsel.
Conference Call to Discuss the Transaction:
Date:
Monday, August 10, 2020
Time:
5:30 p.m. ET
Dial-in:
1-866-952-8559 (Domestic)
1-785-424-1743 (International)
To Access Slide Presentation and Webcast:
https://www.webcaster4.com/Webcast/Page/2298/36374
Replay:
1-877-481-4010 (Domestic)
1-919-882-2331 (International)
Passcode: 36374
About The Peck Company Holdings,
Inc.
Headquartered in South Burlington, VT, The Peck Company
Holdings, Inc. (NASDAQ: PECK) is a 2nd-generation family business
founded in 1972 and rooted in values that align people, purpose,
and profitability. Ranked by Solar Power World as one of the
leading commercial solar contractors in the Northeastern United
States, Peck provides EPC services to solar energy customers for
projects ranging in size from several kilowatts for residential
properties to multi-megawatt systems for large commercial and
utility scale projects. Peck has installed over 160 megawatts worth
of solar systems since it started installing solar in 2012 and
continues its focus on profitable growth opportunities. Please
visit www.peckcompany.com for additional information.
About Sunworks, Inc.
Sunworks, Inc. (NASDAQ: SUNW) is a premier provider of high
performance solar power systems. Sunworks is committed to quality
business practices that exceed industry standards and uphold its
ideals of ethics and safety. Sunworks continues to grow its
presence, expanding nationally with regional and local offices.
Sunworks strives to consistently deliver high quality,
performance-oriented solutions for customers in a wide range of
industries including agricultural, commercial and industrial, state
and federal, public works, and residential. Sunworks’ diverse,
seasoned workforce includes veterans who bring a sense of pride,
discipline, and professionalism to their interaction with
customers. All Sunworks’ employees uphold its guiding principles
each day. Sunworks is a member of the Solar Energy Industries
Association (SEIA) and is a proud advocate for the advancement of
solar power. For more information, visit www.sunworksusa.com
Forward Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements about (i) the benefits of the proposed merger,
including future financial and operating results, cost savings and
synergies, effects on cash flow, market accessibility, financing
opportunities, enhancements to revenue and accretion to reported
earnings that may be realized from the proposed merger; (ii) Peck’s
and Sunworks’ plans, objectives, expectations and intentions and
other statements contained in this press release that are not
historical facts; and (iii) other statements identified by words
such as “expects” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “targets,” “projects,” or words of similar
meaning generally intended to identify forward-looking statements.
These forward-looking statements are based upon the current beliefs
and expectations of the respective management of Peck and Sunworks
and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the control of Peck and Sunworks. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Actual results may differ materially from the anticipated
results discussed in these forward-looking statements because of
possible uncertainties.
Any financial projections in this press release are
forward-looking statements that are based on assumptions that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond Peck’s and Sunworks’ control. 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 Peck and Sunworks, 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 following factors, among others, could cause actual results
to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: (1) 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; (2) the
businesses of Peck and Sunworks may not be combined successfully,
or such combination may take longer, be more difficult,
time-consuming or costly to accomplish than expected; (3) the
expected growth opportunities or cost savings from the proposed
merger may not be fully realized or may take longer to realize than
expected; (4) risks that the merger and other transactions
contemplated by the definitive transaction agreement disrupt
current plans and operations that may harm the parties’ businesses;
(5) the amount of any costs, fees, expenses, impairments and
charges related to the merger; (6) 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; (7) uncertainty as to the long-term value of
Peck’s and Sunworks’ common stock; (8) the ability of Peck and
Sunworks to raise capital from third parties to grow their
business; (9) operating costs, loss of customers and business
disruption following the proposed merger, including adverse effects
on relationships with employees and customers, may be greater than
expected; (10) the stockholders of Peck or Sunworks may fail to
approve the proposed merger; (11) economic, competitive,
regulatory, environmental and other factors may adversely affect
the businesses in which Peck and Sunworks are engaged; and (12) the
impact of COVID-19 and the related federal, state and local
restrictions on each of Peck’s and Sunworks’ operations and
workforce, the impact of COVID-19 and such restrictions on
customers of Peck and Sunworks, and the impact of COVID-19 on the
supply chain and availability of shipping and distribution of each
of Peck and Sunworks. Additional factors that could cause actual
results to differ materially from those expressed in the
forward-looking statements are discussed in Peck’s and Sunworks’
reports (such as Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K) filed with the SEC and
available on the SEC’s Internet site (http://www.sec.gov).
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval with respect to the proposed merger or
otherwise. No offer of securities shall be made except by means of
a prospectus meeting the requirements of the Securities Act of
1933, as amended, and no offer to sell or solicitation of an offer
to buy shall be made in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Additional Information and Where to Find It
In connection with the proposed merger, Peck will file with the
SEC a registration statement on Form S-4 (the “Registration
Statement”) that will include a joint proxy statement of Peck and
Sunworks and a prospectus of Peck (the “Joint Proxy Statement”),
and each of Peck and Sunworks may file with the SEC other relevant
documents concerning the proposed merger. The definitive Joint
Proxy Statement will be mailed to stockholders of Peck and
Sunworks. Stockholders and investors are urged to read the
Registration Statement and the Joint Proxy Statement regarding the
proposed merger carefully and in their entirety when they become
available and any other relevant documents filed with the SEC by
Peck and Sunworks, as well as any amendments or supplements to
those documents, because they will contain important information
about Peck, Sunworks, and the proposed merger.
Free copies of the Joint Proxy Statement, as well as other
filings containing information about Peck and Sunworks, may be
obtained at the SEC’s website, www.sec.gov, when they are filed.
Stockholders and investors will also be able to obtain these
documents, when they are filed, free of charge, by directing a
request to The Peck Company Holdings, Inc., 4050 Williston Road,
#511 South Burlington, Vermont 05403, Attention: Corporate
Secretary, or by calling (802) 658-3378, or to Sunworks, Inc., 1030
Winding Creek Road, Suite 100, Roseville CA 95678, Attention:
Corporate Secretary, or by calling (916) 409-6900, or by accessing
Peck’s website at www.peckcompany.com under the “Company –
Investors” tab or by accessing the Sunworks’ website at
www.sunworksusa.com under the “Investor Relations” tab.
Participants in the Solicitation
Peck, Sunworks, and their respective directors, and certain of
their executive officers and employees may be deemed to be
participants in the solicitation of proxies from the stockholders
of Peck and Sunworks in connection with the proposed merger.
Information about Peck’s directors and executive officers is
available in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, which was filed with the SEC on April 14,
2020, and information about Sunworks’ directors and executive
officers is available in its proxy statement for its 2020 annual
meeting of stockholders, which was filed with the SEC on July 8,
2020. Information regarding all of the persons who may, under the
rules of the SEC, be deemed participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Joint
Proxy Statement regarding the proposed merger and other relevant
materials to be filed with the SEC when they become available. Free
copies of these documents may be obtained as described in the
preceding paragraph.
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version on businesswire.com: https://www.businesswire.com/news/home/20200810005703/en/
The Peck Company Holdings Investor Contacts: Michael
d’Amato IR@peckcompany.com p802-264-2040
ClearThink nyc@clearthink.capital
Sunworks Investor Contact: Rob Fink FNK IR p646-809-4048
rob@fnkir.com
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