SunEdison
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
SunEdison, Inc. (formerly MEMC Electronic Materials) was a US renewable energy company headquartered in Maryland Heights, Missouri. It developed, built, owned, and operated solar and wind power plants worldwide, and also manufactured polysilicon, silicon ingots, wafers, solar modules, and mounting systems. Founded in 1959 as the Monsanto Electronic Materials Company, it became a leading silicon-wafer maker, was sold by Monsanto in 1989, went public in 1995, acquired solar developer SunEdison LLC in 2009, renamed itself SunEdison in 2013, and - after acquiring wind company First Wind in 2014 - became the world's leading renewable energy developer. It employed 7,300 people and had $2.484 billion in 2014 revenue. On April 21, 2016 it filed for Chapter 11 bankruptcy protection and emerged in December 2017 as a smaller, restructured private company.
02 / SunEdison FAILURE REASONS
Failure reasons
SunEdison died of debt-fueled overexpansion. After a 2,000%+ stock run from 2012 to 2015 (peak $33.45 per share, July 2015, valued over $10 billion), the company pursued aggressive acquisitions - First Wind for $2.4 billion in 2014, two yieldcos (TerraForm Power and TerraForm Global), and the announced $2.2 billion takeover of Vivint Solar in July 2015. Debt ballooned past $11 billion by end of 2015 while the Vivint deal faced shareholder and regulator opposition; the stock collapsed. When the Vivint acquisition was terminated in March 2016 and the global solar market hit oversupply, falling prices, and policy uncertainty, SunEdison's cash flow broke. It filed for Chapter 11 on April 21, 2016 listing $16.1 billion in assets and $20.7 billion in liabilities.
03 / EVENT HISTORY
Events in the structured record
- Founded as MEMC
Monsanto Electronic Materials Company was established as a silicon-wafer manufacturer (production started February 1960 in St. Peters, Missouri); it became an industry pioneer (first 125mm, 150mm, 200mm wafers).
- Sold by Monsanto
Monsanto sold MEMC to West German company Huls AG; MEMC went public in 1995.
- Solar pivot
MEMC Electronic Materials acquired solar developer SunEdison LLC for $200 million, beginning the transformation into a solar company.
- Renamed SunEdison
MEMC changed its name to SunEdison, Inc., completing the transition to a dedicated renewable-energy corporation.
- Peak expansion
SunEdison acquired First Wind for $2.4 billion, launched the TerraForm Power yieldco IPO (~$500M), and became the world's leading renewable energy developer; revenue was $2.484 billion.
- Overreach
In July 2015 SunEdison announced a $2.2 billion plan to acquire Vivint Solar; the stock peaked at $33.45 then collapsed as debt passed $11 billion; CEO announced 15% workforce cuts in September.
- Chapter 11
In March 2016 Vivint Solar terminated the acquisition agreement; on April 21, 2016 SunEdison filed for Chapter 11 bankruptcy protection with over $11 billion in debt ($20.7B liabilities); the stock was delisted from the NYSE.
- Emergence
In December 2017 SunEdison emerged from bankruptcy as a restructured, smaller, private company.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
On April 21, 2016 SunEdison filed for Chapter 11 bankruptcy protection in the US, listing $16.1 billion in assets and $20.7 billion in liabilities; the stock was delisted from the NYSE and traded OTC as SUNEQ.
- 02
The TerraForm Power and TerraForm Global yieldcos were not included in the filing; assets were sold off in restructuring (including sales to Brookfield Asset Management).
- 03
In December 2017 SunEdison emerged from bankruptcy as a restructured, smaller private company; equity holders were largely wiped out.
- 04
The SEC and DOJ investigated the company's financial activities.