Communications Systems, Inc. (CSI), an IoT intelligent edge products and services company, announced that it entered into a definitive merger agreement with privately held Pineapple Energy, an operator and consolidator of residential solar, battery storage, and grid services solutions.
Upon closing, CSI will commence doing business as Pineapple Energy, with a business model focused on the rapidly growing home solar industry, it said.
Founded in November 2020 by private equity firm Northern Pacific Group and seasoned industry executives, Pineapple provides solar, battery storage and other energy services to homeowners. Through its unique “battery-first” business model, Pineapple will offer compelling residential solar power systems, with longer-term plans to aggregate its customer fleet into regional virtual power plants.
Commenting on Pineapple’s vision for the future of energy, Pineapple’s Chief Executive Officer Kyle Udseth said, “We see the energy system of tomorrow as a decentralized network grown from the grass roots of individual homeowners and their solar-plus-battery systems. Our vision is for Pineapple to become a champion for homeowners in this energy transition by delivering the best customer experience in a consultative manner. We will offer the full range of financing options and a broad selection of hardware from leading manufacturers, all with the purpose of empowering homeowners and giving them choice. We want to always stay aligned with our customers’ interests, including as we share future grid-services revenues.”
Pineapple recently signed definitive agreements to acquire Hawaii Energy Connection (HEC) and E-GEAR, both Hawaii-based sustainable energy solution providers. These follow on Pineapple’s acquisitions of Horizon Solar Power and certain assets of Sungevity in December 2020.
Udseth noted, “The anticipated addition of HEC and E-GEAR to the Pineapple family will solidify our foundation and expand our geographic footprint. We intend to leverage HEC’s experience in storage design, installation and support, as well as E-GEAR’s proprietary distributed aggregation, control and grid service technology. These advantages will enhance our product offering through the mainland US, including in underpenetrated markets such as Florida and Texas.
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Members of both CSI’s and Pineapple’s management teams will assume leadership roles in the combined company. Roger H.D. Lacey, Executive Chairman of CSI, and Mark Fandrich, CSI’s Chief Financial Officer, are expected to remain in these same roles. The Company expects to remain in its current headquarters near Minneapolis, Minnesota.
Lacey commented, “Over the last three years, CSI’s Special Committee oversaw a series of initiatives designed to drive shareholder value. In 2020, we completed a reorganization of our business. While pleased with our progress, we have concluded that our two current operating segments would provide more substantial long-term growth opportunities to organizations that can unlock additional synergies, expand into adjacent markets, add scale, and broaden their existing product lines. We are committed to finding new owners for these businesses that can continue their long tradition of quality products and services but remain committed to supporting these businesses and their current operations and customers during this process. Meanwhile, by re-inventing CSI through this proposed merger, we will set the stage to become a fast-growing and profitable company, with a focus on delivering immediate value to our shareholders while retaining an opportunity for long-term appreciation.”