Item 1.01 | Entry into a Material Definitive Agreement. |
Underwriting Agreement
On July 24, 2019, Sunnova Energy International Inc., a Delaware corporation (the “Company”), entered into an Underwriting Agreement (the “Underwriting Agreement”) by and among the Company and BofA Securities Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters named in Schedule 1 thereto (the “Underwriters”), providing for the offer and sale by the Company (the “Offering”), and the purchase by the Underwriters, of 14,000,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at a price to the public of $12.00 per share. Pursuant to the Underwriting Agreement, the Company also granted the Underwriters an option for a period of 30 days (the “Option”) to purchase up to an additional 2,100,000 shares of Common Stock on the same terms.
The material terms of the Offering are described in the prospectus, dated July 24, 2019 (the “Prospectus”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) on July 26, 2019 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”). The Offering is registered with the Commission pursuant to a Registration Statement on FormS-1, as amended (FileNo. 333-232393), initially filed by the Company with the Commission on June 27, 2019 (the “Registration Statement”).
The Underwriting Agreement contains customary representations, warranties and agreements of the parties, and customary conditions to closing, obligations of the parties and termination provisions. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act.
On July 29, 2019, the Company completed the Offering and received proceeds (net of underwriting discounts and structuring fees but before offering expenses) from the Offering of approximately $157.9 million. As described in the Prospectus, the Company will use a portion of the net proceeds from the Offering to pay the redemption price for the senior convertible notes due March 2021 of its wholly-owned subsidiary, Sunnova Energy Corporation, a Delaware corporation (“Sunnova Corp”). The Company intends to use the remaining net proceeds for general corporate purposes, including working capital, operating expenses, capital expenditures and repayment of indebtedness.
As more fully described in the Prospectus, certain of the Underwriters and their affiliates have provided in the past to the Company and its affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for the Company and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the Underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in the Company’s debt or equity securities or loans, and may do so in the future.
The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 to this Current Report on Form8-K and incorporated into this Item 1.01 by reference.
Adoption of Agreement and Plan of Merger and Consummation of Holding Company Reorganization
On July 29, 2019, the Company implemented an internal reorganization (the “Merger”) pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 29, 2019, among the Company, Sunnova Corp, and Sunnova Merger Sub Inc., a Delaware corporation (“Merger Sub”), which resulted in the Company’s owning all of the outstanding capital stock of Sunnova Corp. Pursuant to the Merger, Merger Sub, a direct, wholly owned subsidiary of the Company and an indirect, wholly owned subsidiary of Sunnova Corp, merged with and into Sunnova Corp, with Sunnova Corp surviving as a direct, wholly owned subsidiary of the Company. Each share of each class of Sunnova Corp stock issued and outstanding immediately prior to the Merger, by virtue of the Merger and without any action on the part of the holder thereof, automatically converted into an equivalent corresponding share of stock of the Company, having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions with respect to the Company as the corresponding share of Sunnova Corp stock being converted with respect to Sunnova Corp. Accordingly, upon consummation of the Merger, each of Sunnova Corp’s stockholders immediately prior to the consummation of the Merger became a stockholder of the Company.