Privately held Pineapple Energy LLC, a growing U.S. operator and consolidator of residential solar, battery storage and grid services solutions, has entered into a definitive merger agreement with Communications Systems Inc. (CSI), a Nasdaq-listed IoT intelligent edge products and services company. Faegre Drinker is representing Pineapple Energy in connection with the planned merger.
Upon closing, CSI will commence doing business as Pineapple Energy, with a business model focused on the rapidly growing home solar industry. In conjunction with the merger, CSI intends to divest substantially all its current operating and nonoperating assets, including its electronics and software and services and support businesses, real estate holdings, as well as cash, cash equivalents and investments, and is in discussions and negotiations with potential acquirers of its business segments and real estate holdings. Under the terms of the merger agreement, each CSI shareholder, as of the merger record date, will receive contingent value rights (CVRs) that reflect the right to receive that shareholder’s percentage of the net proceeds from the sale of legacy CSI businesses and assets after the closing. CSI currently expects that these CVRs will be nontransferable.
Faegre Drinker is also representing Pineapple Energy in connection with its recently signed definitive agreements to acquire Hawaii Energy Connection (HEC) and E-GEAR, both Hawaii-based sustainable energy solution providers. These follow on Pineapple Energy’s acquisitions of Horizon Solar Power and certain assets of Sungevity in December 2020, in which Faegre Drinker represented Pineapple Energy. In particular, HEC is among the leading solar, battery storage, and distributed energy resource (“DER”) management companies in the nation's most advanced alternative energy market. These pending acquisitions are expected to close simultaneously with the closing of the CSI-Pineapple Energy merger. The combined company’s post-merger strategy is to consolidate other leading regional players, with several acquisition targets already in the due diligence phase.