Gaiam, Inc. announced it had divested most of its stake in a solar energy company and will use the proceeds to invest in its core business of selling fitness products and media.
Gaiam sold approximately six million shares of Real Goods Solar, Inc. for net proceeds of $16.4 million. Following these transactions, Gaiam continues to own approximately 4.1 million shares of Real Goods Solars common stock. On May 24, 2013, Real Goods Solar announced that it had entered into a definitive agreement to raise over $9 million in a private placement of approximately 3.3 million of its shares. The transaction funded on June 3, 2013. In connection with the funding, Gaiam agreed to a 90-day lock-up of the shares of Real Goods Solars common stock that it continues to own.
With its new senior management team and additional financing in place, it is time for Gaiam to reduce its investment of financial and management resources in Real Goods Solar and re-deploy those assets for the benefit of Gaiams core businesses, said Lynn Powers, CEO of Gaiam.
To underscore this direction, following Gaiams sale of Real Goods Solar shares, Gaiams Chairman, Jirka Rysavy, resigned from his position as Real Good Solars Chairman that he had held since its inception.
In 1999, Gaiam founded its solar division Gaiam Energy Tech, which during the 2008 IPO process adopted the name Real Goods Solar, said Powers. Monetizing a portion of this Gaiam spin-off allows the company to strengthen its financial foundation and continue growing its core businesses. For 2012, Gaiams total revenues rose 22 percent, and we are off to a strong start in 2013 with first quarter revenues up nearly 20 percent over the comparable prior-year period. We are encouraged by the momentum we are generating in both our business and direct-to-consumer segments and believe the added financial flexibility to invest in and support core business growth will benefit Gaiam and our shareholders.
The sale of the Real Goods Solar common stock will result in a significant gain to Gaiam since, as Real Goods Solars founder, its basis in the shares is low. Gaiam will utilize a portion of its net operating loss carry forwards to fully offset the income tax gain.
Gaiam is a leading producer and marketer of lifestyle media and fitness accessories. With a wide distribution network that consists of over 60,000 retail doors, 15,000 store within stores, and 6,000 media category management locations, and a digital distribution platform, Gaiam is dedicated to providing solutions for healthy and eco-conscious living. The company dominates the health and wellness category and releases non-theatrical programming focused on family entertainment and conscious media. In addition, Gaiam has exclusive licensing agreements with Discovery Communications and other licensing partners.
