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SolarCity buying Zep Solar in $158M deal

SAN MATEO, Calif. (AP) -- SolarCity is buying Zep Solar Inc. in a stock deal valued at about $158 million.

The purchase amount may be lowered depending on the amount of debt that Zep has at closing.

The acquisition will allow SolarCity to deliver power at costs lower than it had been able to previously, said Tanguy Serra, SolarCity's executive vice president of operations. .

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.

Privately held Zep provides residential photovoltaic module mounting systems in the U.S. and is one of SolarCity's primary component suppliers for residential systems. Serra said that after the closing the companies plan to market and sell Zep products in Australia, Germany, Japan and the U.K.

Zep, based in San Rafael, Calif., will become an independent unit of SolarCity once the transaction is complete and CEO Mike Miskovsky will remain in his post.

The buyout is targeted to close in December.

The acquisition deal comes after SolarCity announced in August that it was buying Paramount Energy Solutions LLC in a cash-and-stock deal valued at about $120 million.

The stock gained 5 cents to $39.05 in Wednesday premarket trading.