Vehicle electrification company, XL Fleet, completed the acquisition of solar systems operator, Spruce Power, for an enterprise value of $600 million, including cash consideration of $58 million and the assumption of $542 million of debt. 

The acquisition serves as a cornerstone of XL Fleet’s new corporate strategy to become a provider of subscription-based solutions for rooftop solar, battery storage and EV charging.

Spruce Power is the U.S.’s largest privately held owner and operator of distributed generation residential rooftop solar systems, with over 52,000 subscribers. The company has more than doubled revenues since 2019, primarily through a series of acquisitions of portfolios of residential solar systems from other companies and investors.

XL Fleet CEO Eric Tech said:

“Earlier this year, we communicated our intent to transform the company and create shareholder value through strategic M&A. The acquisition of Spruce Power is a critical first step in that transformation and will be the cornerstone of our new strategy to provide subscription-based solutions for rooftop solar, battery storage and EV charging to homeowners and small businesses.”

According to Tech, the company’s new corporate strategy comes amidst growing demand for distributed generation and electric vehicles from consumers and businesses aiming to mitigate the impact of rising energy costs and to become more sustainable, while subscription-based services “make it easy for homeowners and small businesses to own and maintain rooftop solar, battery storage and electric vehicle charging systems are in high demand,” by enabling access to new technology without significant upfront investment.

Christian Fong, CEO of Spruce Power, and newly appointed President of XL Fleet, added:

“The Spruce team is incredibly excited about joining the XL Fleet platform and motivated by the potential value created by combining our two companies. With XL Fleet’s resources, we now have the tools to significantly accelerate the growth in our business, while continuing to execute on our mission to lower the cost of energy for our customers and create a more sustainable future.”