Energy

Utah's Former High-Flying Solar Company, Lumio, is About to Be Acquired for ~$100 Million Out of Chapter 11 Bankruptcy Proceedings

Jacob Peter Gowy's "The Fall of Icarus," photo downloaded from Wikipedia 27 September 2024.

Although it started with a bang in mid-2021 with the announcement that it had acquired five separate residential solar companies, Lehi, Utah-based Lumio has now crashed back to earth as it has filed for Chapter 11 bankruptcy protection and entered into a $100 million "Stalking Horse" agreement to be acquired by an affiliate of its leading lender.

According to the news release published by Lumio earlier this month, prior to filing for bankruptcy protection on 03 September 2024, the company "... entered into a stalking horse asset purchase agreement (APA) with an affiliate of White Oak Global Advisors, (Lumio's) primary senior secured lender."

If the APA is accepted by the Bankruptcy Court,

"... White Oak (would) acquire substantially all of ... (Lumio's) ... assets for a total purchase price of approximately $100 million in the form of a credit bid."

If it is successful in its APA offer to acquire Lumio's assets, White Oaks plans to "... offer significant equity ownership to (Lumio's) employees."

Prior to the bankruptcy filing, White Oaks entered into an $8.0 million debtor-in-possession (DIP) financing agreement with Lumio (subject to approval by the Bankruptcy Court), monies designed to allow Lumio to continue operations during the bankruptcy proceedings.

According to the release, as well as filings with the U.S. Bankruptcy Court (District of Delaware), the expectation is that the proposed purchase of Lumio will be completed before the middle of November 2024, with a virtual auction for the Lumio assets slated for 09 October 2024.

Lumio: An Icarus-like Tale?

According to Greek mythology, after Daedalus and his son, Icarus, escaped captivity on the Isle of Minos, Daedalus crafted wings of metal, wax and leather to enable them to fly from the island to their freedom.

Icarus sculpture by British sculptor, Alfred Gilbert. Photo downloaded from Unsplash on 27 September 2024.

But before taking flight, Daedalus warned his son, "Do not fly too close to the sun."

Alas,

Icarus did not listen,
The wax holding the metal feathers in place began to melt as he flew higher and higher, until
Icarus eventually fell to his death.

Lumio took flight with great fanfare in the summer of 2021 when it announced its creation with the simultaneous acquisition of five regional residential solar companies:

Atlantic Key Energy,
DECA,
LIFT Energy,
Our World Energy, and
Smart Energy Today,

as reported by Solar Builder.

With the acquisitions, Lumio claimed that it had already surpassed $1.0 billion in annual revenue, transforming it (at the time) into what it claimed was a Top 5 residential solar company in the United States.

That said, there were also early signs of potential challenges for Lumio, as one of its announced acquisitions (Our World Energy) was not actually consummated.

However, in August 2021, Lumio announced it would expand beyond residential solar with the planned acquisition of Unyte Home Services and its "Home Experience (HX) offerings."

With Unyte within its fold, Lumio planned to enable homeowners to

"... automate and unite their selection and connection of home services like TV and Internet, with home systems like solar, security, property management, flood sensors, smart sprinklers and HVAC."

So when the company announced in September that its Founder/Chairman and vaunted serial entrepreneur, Greg Butterfield, had taken on the role of Chief Executive Officer, I was not surprised.

Then, in December 2021, Lumio announced that it had secured $110 million in external investments, led by White Oak Global Advisors, with participation from Fiera Comox.

With that funding, the flight path seemed set for Lumio to achieve national, if not global dominance, in both the residential solar and home automation world.

{Author's Musing: In hindsight, I would not be shocked to learn that each of the news announcements noted above had actually been known in advance and staged to produce a "rolling thunder-like" PR effect, something former Novell PR, marketing and sales employees know all about. [BTW: Butterfield was Novell's VP of Sales in the mid-1990s.] Just an observation.}

So now, just over two-and-a-half-years later, Butterfield is no longer the company CEO (or Chairman), having apparently left Lumio in December 2023 (according to his LinkedIn profile).

Surprisingly, Butterfield's departure was not announced by the company.

His replacement as CEO, Andrew Walton, was not announced until 12 March 2024, with the promotion of Brendan Smith to President from COO also announced in the same news release.

It is strange to me that Lumio chose not to announce separately that it had raised an additional $40 million in venture capital funding, but rather slipped this news into the announcement about its new CEO.

In other words, to borrow from the writings of Lewis Carroll, "Curiouser and curiouser."

Since then, Lumio made two separate announcements:

The hiring of a Vice President of New Home Builds (also in March), as well as
The addition of a Chief Strategy Officer (in June).

But now, a little over three years on, Lumio has apparently crashed back to earth, hubris and all, soon to be (if all indications are correct), a wholly owned portfolio company of White Oak.

Final Thoughts

Personally, I wish I could say I was surprised.

But given the amount of financial challenges across the residential solar industry over the past 18+ months, I'm actually surprised we haven't seen more bankruptcies and closures in this marketplace.

{For reference, please see "Less than Three Years After Being Acquired by SunPower for $165 Million, Utah-based Blue Raven Solar is Now "On the Market" at Fire Sale Prices as SunPower Files for Bankruptcy."}

So clearly, there is more to come.

As such, I plan to provide additional Lumio-related updates as there is more to report.

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