U.S. Markets open in 8 hrs 58 mins

SolarCity buying Paramount Solar in $120M deal

SAN MATEO, Calif. (AP) -- SolarCity is buying Paramount Energy Solutions LLC in a cash-and-stock deal valued at about $120 million.

The transaction includes $116.3 million in stock and $3.7 million in cash.

SolarCity Corp., based in San Mateo, Calif., leases and installs solar energy systems for homes and businesses. The company installs solar panels on customer roofs for no upfront cost. Customers agree to pay a set price for the electricity generated by the panels, usually over 20 years.

Paramount Energy, which does business as Paramount Solar, is majority owned by Guthy Renker, a direct marketing company known for sales of Proactiv skincare products.

Guthy Renker CEO Ben Van de Bunt is expected to join SolarCity's board later this year.

The CEO of Paramount Equity, Hayes Barnard, will also become SolarCity's chief revenue officer. He will handle the company's sales and marketing responsibilities once the buyout closes. Paramount Solar is a subsidiary of Paramount Equity.

Paramount Equity Mortgage LLC, Value360 LLC and Ironstone Insurance LLC, the remaining units of Paramount Equity, will continue to operate as independent companies once the deal is complete.

The acquisition is expected to close in September.

Shares of SolarCity rose 41 cents to $38.53 in midday trading on Tuesday.