Singlepoint Inc.: Recent Acquisitions Completes Comprehensive Vertical Integration

We have covered SinglePoint Inc. (OTCQB:SING) in the recent past as a high-potential player in the renewable energy domain that is capitalizing on the increased commercial and residential demand for solar and energy storage installation services. In the past few weeks, the company has announced a couple of significant acquisitions that have dramatically  increased their competitiveness and scale. As the management of SinglePoint prepares itself for an up-listing to the Nasdaq, we see a significant upside in this diversified sustainability-focused conglomerate. Let us have a closer look at its latest  developments.

Business Recap

SinglePoint is a provider of renewable energy solutions and energy-efficient appliances in the U.S. market. 

The renewable energy division of SinglePoint includes Direct Solar America,  which  assists homeowners and small businesses in implementing solar energy as a power source for their respective units while also maximizing solar’s benefits. The company helps educate customers and deliver on the company’s promise of providing a superior customer experience. Direct Solar America is supported by the combination of several assets, including Energy Wyze, SinglePoint’s solely owned lead generation company. Management believes that by bringing various aspects of the solar process together– vertical integration– under one roof, SinglePoint can control the customer experience from lead generation to installation. This ensures the best experience and unmatched customer service.

Boston Solar Acquisition

In April 2022, SinglePoint expanded its solar portfolio by acquiring The Boston Solar Company, a leading solar installer based in Massachusetts. Since 2011, Boston Solar has been serving primarily the New England market, installing more than 5,000 residential and commercial solar systems that power thousands of homes and businesses. It has received numerous awards in its field, including GuildQuality’s 2020 Guildmaster Award for demonstrating exceptional customer service in the residential construction industry. Boston Solar has been named a Top Solar Contractor by Solar Power World magazine and one of the “Largest Clean Energy Companies in Massachusetts” by the Boston Business Journal. The company is a Proud Partner of the Boston Red Sox and was also contracted to install a solar system at the new MGM Music Hall at Fenway Park. It is worth highlighting that Boston Solar reported just over $17 million in revenue for the fiscal year 2021, and is expected to add at least $25 million in 2022, with over $16 million already contracted in the pipeline. The Boston Solar acquisition is an important first step in SinglePoint’s long-term acquisition-led growth strategy, as the company’s management plans to continue expanding its operational footprint by acquiring more full-service solar EPC (Equipment Procurement and Construction) companies across the United States expanding synergies and scale.

Frontline Power Solutions Acquisition

SinglePoint continues driving its inorganic growth trajectory for the renewable energy business segment. The company  recently entered into a definitive agreement to purchase Frontline Power Solutions, an energy services company. It is evident that Frontline Power would be a good fit for SinglePoint given that the FPS leadership has worked with over 4,500 clients across the country. They will be able to provide their new and existing customers with a full range of energy-related products tailored to their specific needs, lowering energy costs and carbon emissions while moving toward a greener environment. Both companies’ continued growth will be secured by this comprehensive approach. As more clients turn to energy independence and off-grid sustainability, Frontline Power’s target market expands and will offer SinglePoint more synergistic revenue opportunities.

Upon completion of this planned acquisition, SinglePoint and its core subsidiaries will be able to offer a full range of power solutions, whether through self-generation or preferred power purchase agreements. The ability to provide wholesale power, solar power generation, and energy storage to Frontline’s clients will further distinguish SinglePoint and Frontline as they expand service offerings to meet and exceed the energy needs of current and future clients. In addition, SinglePoint will continue to acquire companies with products and services aligned with their strategic goals. The company’s aggressive expansion roadmap is an integral part of the company’s business plan to become the leading national network of solar and energy solutions services. With the recent addition of Boston Solar and the planned addition of Frontline Power, the company also plans to spin-off or sell non-core assets such as ShieldSaver and Discount Indoor Garden Supply. In the event of a spinoff, the plan is for a one-for-one share distribution to SinglePoint shareholders of record. This divestment will allow SinglePoint’s management team to focus on expanding their core product offerings and services, executing their acquisition strategy and enhancing profitability.

Final Thoughts

Source: TradingView

We see a range bound  chart for SinglePoint’s stock over the past six months. One of the biggest factors responsible for this relatively flat performance was the threat of tariffs on solar panels imported from Asia. This uncertainty on solar panel supply and cost undoubtedly had an effect on solar panel manufacturers and solar energy installers like SinglePoint. With the recently announced 24 month moratorium on tariffs the solar energy industry has been effectively unlocked. And, on a macro level, the rate hike by the Federal Reserve as well as the Russia-Ukraine conflict and the geopolitical tensions surrounding the situation had its inevitable negative effect as well.  From a valuation standpoint, the company is trading at an incredibly modest price-to-sales multiple of 0.15  (Projected 2022 revenue of $47 million divided by current $7 million market capitalization) which is significantly lower than most of its solar industry peers.  . We believe that the company is on a hyper-growth track with the recent  acquisitions and that it is the right time for small-cap shareholders to capitalize on the situation by investing in the stock for multibagger returns in the long term.

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