2011 Greentech M&A Results

The U.S. greentech sector saw 353 transactions completed in 2011 for a reported $13.9 billion—down 6% from the $14.7 billion posted in 2010. While greentech funding rose 4% to $10.6 billion, mergers and acquisitions slumped 29% to $3.3 billion. Some of the major developments (or lack thereof) included the rollout of electric vehicles from Chevrolet and Nissan, the shocking demise of thin-film solar manufacturer Solyndra, and another year of stalled progress in the area of U.S. energy policy. To learn more about how greentech M&A  fared in 2011, make your way over to our 2011 Greentech M&A Review.


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Greentech Mid-Year: Numbers Belie Concerns

We just released our 2011 Greentech Mid-Year M&A Review, which examines how the U.S. greentech M&A environment has evolved since the beginning of the year. M&A activity climbed 8% to $8.8 billion in the first half, but a look beneath the surface offers additional insight:

Although first half numbers show stabilization, if not modest growth, in U.S. greentech M&A activity, further examination reveals a more complex outlook for the sector. The paralysis and cyclical shifts that have plagued U.S. energy policy have dampened investor sentiment while feared cuts in cleantech subsidies threaten to slow growth and innovation. Pessimism was reflected in the venture capital community, where capital raises dropped 12% from the same period last year. This cynicism was also reflected in the stock market, where the PowerShares Clean Energy ETF fell 13.4% in a first half that saw the broader S&P 500 rise 5.0%.

To continue reading, here is the complete report.


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Renewable Energy Investments Panel Discussion

Peachtree is proud to partner with Herrick, Feinstein LLP in sponsoring Renewable Energy Investments: Opportunities and Pitfalls for Private Equity Investors, an evening panel discussion to be held on May 19, 2011. The panel discussion will focus on key considerations for private equity investors seeking opportunities in the renewable energy space. Our panelists, which include Jar Shah (founder of SunEdison), Richard Kaufman (former CEO of Good Energies), and Neil Wallack (President of ZBI Ventures), will discuss some of the distinctions among the various asset classes within the renewable energy space, the concept of creating climate wealth and identify obstacles to achieving returns, as well as the risks and other factors that impact renewable energy business models.

For more information, please visit the official event invitation.


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Greentech M&A Rises 55% in 2010

Today we released our annual greentech M&A report, which is available on our website. In an up-and-down year for U.S. greentech M&A, 371 mergers, acquisitions, and capital raises were posted in 2010 for a reported total of $14.7 billion — 55% higher than in 2009. Energy efficiency was a clear benefactor from a shift in investor interest from megawatts (renewable energy generation) to negawatts (saving energy), while smart distribution led the M&A front with a string of smart grid acquisitions made by large corporations jostling for position in this growing market. Meanwhile, valuations crept downward as uncertainty in U.S. energy and climate policy challenged investor confidence in the cleantech sector. To read the full report, follow this link: http://bit.ly/eR2yoN.


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Peachtree Represents Focused Energy in Sale to BayWa

We at Peachtree are happy to announce that our client, New Mexico-based solar integrator Focused Energy, was acquired yesterday by German trading firm BayWa AG.

The acquisition marks the entrance of BayWa’s quickly-growing renewable energy business into the US, where the solar photovoltaic (PV) market is experiencing phenomenal growth. Here are a couple of excerpts from the official press release.

“This is an important acquisition for us, since it allows BayWa to make a successful entry into the high-growth American PV market. The acquisition represents a further important step towards the consistent implementation of our growth strategy in the renewable energies area,” commented BayWa AG CEO, Klaus Josef Lutz.

Focused Energy is a leading US wholesaler reporting strong growth and margins in the residential and small to mid sized commercial market segments. “We regard ourselves as very well positioned to benefit disproportionately from the expected strong growth in the US market thanks to our established brand combined with the critical volume that we have achieved, as well as our well established customer relationships,” noted founder and CEO Paul Benson. “We are convinced that Focused Energy will be able to develop significantly greater potential as part of the BayWa Group.”

You may access the full press release on BayWa’s site.


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The Cloud Needs Renewable Energy, IT & the Internet

I just returned from a wave of conferences and wanted to provide the link to an interesting presentation given my Emulex at the Interop conference in NYC.  This presentation clearly outlined the building blocks necessary for the cloud to be successful: power; cooling; control (mgt); network (data); and optimized delivery.  The utility scale data center needs to not only be efficient, but fast and reliable (secure is a given).

Link to the Emulex Interop Presentation

David Crespi, CTO of Emulex, goes on to state that the utility scale data center, which is the next step in the cloud evolution, needs to be near a power source with reliable and low-priced energy as well as a natural cooling source, such as water.  This led me to believe that the future of the utility scale data center lies at the intersection of three completely different vertical markets – greentech/renewable, IT and the Internet.   For example, water can provide both a cooling mechanism as well as hydro-power, which is a form of renewable energy.  This water can then be channeled through the data center to cool the servers during the day.   The IT server stack needs to be large enough to allow companies to scale at any time in order to use the utility pricing model of the cloud effectively.  Finally, there is the Internet.  The data center needs to unfettered Internet access, so that companies are able to access their data with minimal interruption.

I am clearly not doing the presentation justice in my blog post, but I think it is interesting the way renewable energy, IT/data centers and the Internet will converge to make utility scale cloud a reality.


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Link to Cisco’s Acquisition History

While it is not “blog”worthy to mention that Cisco is gearing up for more acquisitions, especially while tech consolidation is on an upswing, but it is interesting to look at their most recent acquisitions.  Here is a link to the Cisco Web site that lists all of their acquisitions by year.

Cisco Acquisitions Last Ten Years

Cisco’s acquisition of Arch Rock Corporation is an extremely savvy move as it relates to the smart grid and networking energy use in the home.  Google has also been poking its nose around the smart grid sector as well and now the gauntlet has been thrown.  Google  will likely follow up with an acquisition of its own.  Why not?  They have the money and the opportunity it just too big!


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Solar Continues Rapid Growth

The Solar Energy Industries Association (SEIA) recently released their 2009 U.S. Solar Industry Year in Review. Despite recessionary pressures that plagued the overall economy, solar continued on its impressive growth track, with U.S. solar capacity adding 37% onto its 2008 capacity. Solar power in the U.S. is now a $4 billion industry as it continues to gain mainstream adoption.

Though venture capital funding for solar dropped sharply in 2009 — as it did across the board for most sectors — we are beginning to see capital inflow again in 2010. Just two weeks ago, concentrated photovoltaic manufacturer Amonix completed a colossal $129.4 million round of funding led by Kleiner Perkins Caufield & Byers. As the economy recovers, we can expect to see more deals of this sort as investors jump aboard the solar growth train.


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Greentech Mergers & Acquisitions 2009

The Peachtree Green Advisors 2009 Greentech M&A Round Up has been released.  In 2009, there were 248 greentech mergers, acquisitions, and capital raise transactions in the U.S. for a reported total of $9.5 billion. Distribution, Storage & Efficiency led the way with 90 transactions.

A resilient U.S. greentech M&A market saw 248 greentech mergers, acquisitions, and capital raises in 2009 for a reported total of $9.5 billion, falling a respective 14% and 4% from 2008. The declines, however, were more than offset by generous amounts of funding from the Department of Energy (DOE), courtesy of the American Recovery and Reinvestment Act of 2009.

As we look ahead to 2010 and beyond, it will be interesting to see whether venture capitalists step up when DOE funding runs out, and whether large utilities and Fortune 500 companies continue funding programs initially financed by the DOE.

For a comprehensive analysis of the greentech M&A environment in 2009, download the complete report from Peachtree Media Advisors at http://peachtreegreenadvisors.com/?p=research.

Best,

John


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Greentech Needs Digital Media

When I say greentech needs digital media, I do not mean organizing environmentalists to attend rallies at the Copenhagen world climate change conference.  What I mean is that digital media is going to be instrumental in getting information to the consumer, especially when there is a muddled message or conflict of interest at the point of sale.  This “need” for a direct line of communication was most apparent with recent trips to auto dealerships while considering the purchase of a hybrid for my mom.

My mom is in the market for a new car, so I asked her to consider a hybrid and took her to a few dealerships in West Palm Beach during the Thanksgiving break.  I was surprised to find that Florida has a limited supply of hybrids and shocked at the level of anti-hybrid sentiment on the part of the car salesmen.

The only rationale I can think of trying to convince someone to not buy a hybrid who specifically went into the dealership to look at hybrids was because the sales margin or commission on hybrids was much lower than traditional gas vehicles.  (I clearly understand why for the guys who did not have any hybrids in stock.)  With the exception of a Toyota dealership that had the Prius in stock and the Lexus dealership that had the Lexus hybrid in stock, most sales guys were anti-hybrid.  Ummm…Ford/GM, you’ve got a real problem.

My point is that misinformation, especially at the point of sale, is going to be a big problem for green companies trying to sell to consumers through traditional retail channels.  If someone can be convinced that there is no science behind global warming, that smoking is not really that bad for them, or even that there is a magic pill that allows them to eat all the carbs they want, then it will be easy to say that hybrids are a waste of money or “hybrid just means more expensive.”  All it took was a few scumbucket sales guys and my mom was convinced that hybrids were “actually” not that practical.  Also, these car salesmen made these cases to my mom when I was not in the vicinity.  Wow.  As if she would not tell me exactly what they said to her.

This is a reflection of sales channel conflict that is a primary challenge for many greentech companies.  In addition to developing their own sales channels, separate and distinct from traditional sales channels, greentech companies need to develop one-to-one relationships with consumers.  Digital media is the most cost-effective media vehicle to make their case.  In this case it was a hybrid car, but in other cases it could be a multi-million commercial lighting program for a new skyscraper or G Diapers.  Yes, someone told me that Pampers and G Diapers were the same for the environment.  People will say anything for any reason and, therefore, controlling the message is a critical element to success for this sector.


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