US-based residential solar energy services provider Sunrun has signed a definitive agreement to acquire Vivint Solar for an enterprise value of $3.2bn.

Upon completion of the deal, the stockholders of Vivint Solar are expected to own about 36% of the fully diluted shares of the combined company, while Sunrun stockholders will hold about 64%.

Vivint Solar is a major full-service residential solar provider in the US. It designs and installs solar energy systems for homeowners and offers monitoring and maintenance services.

The transaction is expected to enable the companies to lay the foundation for structural cost reductions and improved customer experience.

The combined company is estimated to see cost synergies of $90m on an annual basis.

The acquisition is expected to enable Sunrun to become a major home solar and energy services company across the US.

By adding a complementary direct-to-home sales channel to its platform through the acquisition, Sunrun is anticipated to expand its reach and capabilities in a growing market.

The deal is expected to be completed in the fourth quarter of 2020

Sunrun CEO and co-founder Lynn Jurich said: “Americans want clean and resilient energy. Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries.

“This transaction will increase our scale and grow our energy services network to help replace centralized, polluting power plants and accelerate the transition to a 100% clean energy future.

“We admire Vivint Solar and its employees, and look forward to working together as we integrate the two companies.”

The combined entity will have a customer base of nearly 500,000, with over 3GW of solar assets on the balance sheet.

Subject to approval from Vivint Solar and Sunrun stockholders, regulatory approvals and other customary closing conditions, the transaction is estimated to be completed in the fourth quarter of the year.