Sunworks (SUNW) will acquire Solcius for $51.8 million

Sunworks, Inc. (NASDAQ: SUNW) ("Sunworks"), a provider of solar power and storage solutions for agriculture, commercial, industrial, public works, and residential markets, and Solcius, LLC ("Solcius"), a privately held, rapidly growing residential solar company, today announced that they have entered into a definitive agreement pursuant to which a subsidiary of Sunworks will acquire Solcius, valued at $51.8 million on a cash-free and debt-free basis, in an all-cash transaction.

The transaction creates a national solar power provider with a presence in 12 states, including California, Oregon, Utah, Nevada, Arizona, New Mexico, Texas, Colorado, Minnesota, Wisconsin, Massachusetts, and South Carolina. Together, the combined organization generated net revenue of approximately $131.5 million in calendar year 2020. Sunworks expects the combined company to be profitable in the first full year after integration and after capturing strategic, operational, and cost synergies.

Acquisition Rationale and Highlights

• Combination creates a national leader in the rapidly growing residential space, poised to capitalize on significant strategic synergies.
• Leverages expertise and infrastructure of Solcius to quickly and cost-effectively establish a presence for residential solar installation in new markets.
• Provides Sunworks with a national footprint to facilitate diligent and rapid expansion of agricultural, commercial, industrial, and public works service offerings in additional geographies.
• Improves scale, with pro forma revenue of approximately $131.5 million if the companies had been combined for all of calendar year 2020, and a combined backlog of $81.4 million if the companies had been combined as of December 31, 2020.
• Enhanced economies of scale, leading to better access to suppliers, vendors, and financial partners, as well as marketing and customer acquisition opportunities.
• The transaction is expected to be accretive to earnings and will drive cash flow once integration synergies have been implemented.

Gaylon Morris, Chief Executive Officer ("CEO") of Sunworks, commented, "Together, the combined organization will be better equipped to deliver solar EPC and development solutions to a broader customer base across the United States, focusing on the rapidly growing residential, commercial, industrial, and public works markets. By leveraging economies of scale, the combined company will be able to secure materials more quickly, with greater reliability, and at a more beneficial price point. We feel confident the combination will increase brand awareness across our customer and partner bases due to the greater scale and a significantly enhanced service offering. In addition, Solcius has proven to be highly adept, with sophisticated technology that not only accelerates growth into new markets by supporting expansion of its customer-focused team but also increases efficiencies across the entire installation process, driving improved customer satisfaction. We believe this combination creates a compelling, well-capitalized, publicly-traded solar leader poised for accelerated, profitable growth. We welcome the hard-working team from Solcius and their established business partners into the Sunworks family."

Jason Knapp, President of Solcius, added, "Combining Solcius' growing residential business and expanding national footprint with Sunworks' established agricultural, commercial, industrial, and public works capabilities will provide synergies and scale to accelerate the growth and expansion that was challenging as two separate, independent companies. I am proud of what the Solcius team has accomplished as a privately held company and am excited to integrate our organization with Sunworks to begin the next phase of our evolution."

Transaction Details

The Board of Directors of each of Sunworks and its subsidiary, Sunworks United, Inc., unanimously approved the definitive transaction agreement, which includes an all-cash payment of $51.8 million, subject to customary purchase price adjustments, and customary seller representations and warranties and indemnification obligations.

In 2020, Solcius generated approximately $93.4 million in revenue and reported $2.8 million of operating income.

Mr. Morris will serve as the CEO of the combined organization, and Mr. Knapp will continue as President of Solcius. The existing Sunworks Board of Directors will remain as currently constructed.

Additional details of the transaction will be included with the Company's current report on Form 8-K, which will be filed with the United States Securities and Exchange Commission.

Conference Call to Discuss the Transaction:

Sunworks and Solcius will host a joint investor conference call today, Thursday, April 8, 2021 at 5:30 p.m. Eastern Time to discuss details of the transaction.

Interested parties may join the conference call by dialing:

• U.S. dial-in: (844) 602-0385
• International dial-in: (862) 298- 0970
• Conference ID: 65324411

A live and archived webcast will be available on the investor relations section of the Sunworks investor relations website at https://ir.sunworksusa.com/events.

Following the conclusion of the live call, a replay of the webcast will be available on the Sunworks website for at least 90 days. Alternatively, a telephonic replay of the call will be available beginning at 8 p.m. Eastern Time on April 8, 2021 and can be accessed until 11:59 p.m. Eastern Time on April 22, 2021 by calling (877) 481-4010 in the U.S. or (919) 882-2331 internationally, with access code 40787.

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