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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Silver Spring Acquires Greenbox

SilverSpring logoThis acquisition is a solid example where digital media and technology expertise is being utilized in greentech environments.  In order to reduce our carbon footprint, not only does there need to be an increase in demand for renewable energy, but there also needs to be an increase in the level of consumer engagement with regard to energy use.  Digital media technologies will play a key role with cleantech companies trying to engage with consumers to lower their energy use during peak demand.  Silver Spring clearly understands this point in their decision to buy versus build with their acquisition of Greenbox Technologies.  (Peachtree Media Advisors, Inc clearly understands this as well with Peachtree Green Advisors!)

According to their press release, the acquisition allows Silver Spring to provide another application to their customers – “a smart and intuitive energy-management portal.”  The Greenbox technology allows consumers to engage in time-of-use and other Smart Grid-enabled energy-saving programs.  According to Jonathan Gay, Founder and CTO, Greenbox Technology, Greenbox can now deploy its home energy-management solution much faster and more broadly than they could alone.

I wish Ivo (Greenbox’s CEO) and his team luck with their new partner.  Although the real trick is getting consumers to actually care about their energy usage, you will not be able to get them to take action without being somewhat engaged by at least being hooked up to the monitor!

Best,

John Doyle


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2009 U.S. Green Tech Transactions YTD

In the first seven months of 2009, transaction volume in the U.S. renewable and clean tech sectors of energy declined 40.9% versus the same period in 2008.  It is important to note that sustainable energy transaction volume fell off of a cliff in the fourth quarter of 2008, which means that the first three quarters of 2009 are not necessarily an apples-to-apples comparison.  The uncanny retreat of investors and venture capitalists to safer proven investments (if investing at all) was a clear sign of significant fear in the marketplace.   More importantly, the first nine months show a trend toward less capital intensive energy efficiency investments on the part of U.S. VCs.

Green Tech Transaction Volume 2009

In the first seven months of 2009, 101 transactions were completed for a reported $2.29 billion in deal value versus 171 transactions and $4.90 billion for the same period in 2008.  Deal value declined 53.3% in the 1st seven months of 2009 vs 2008 as a direct result of access to acquisition capital in the form of credit and stock.  Debtors were clearly skittish in the last nine months and when valuations fell off of a cliff in the latter part of 2008, companies could not issue stock to raise money for acquisitions at favorable valuations.  It goes without saying that buying a company with paper was too expensive a proposition for most public companies based on their much higher stock prices just a few months prior.

Green Tech 2009 Transactions


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Peachtree Green Advisors M&A

Green Logo JPEGPeachtree Green Advisors, a division of Peachtree Media Advisors, Inc.,  is a new investment banking division that serves the needs of the rapidly growing renewable and clean tech sectors of energy.  Peachtree Green Advisors provides capital raise, merger and acquisition, DOE grant writing, strategic partnership and joint venture advisory services to early-stage and middle-market companies.  Leveraging fifteen years of investment banking experience in the media and technology sectors, Peachtree Green Advisors is well-positioned to assist entrepreneurs and growing clean tech companies with maximizing value at each stage of the transaction.

Peachtree Green Advisors will focus on the following sectors of sustainable energy:

  • Battery/Storage
  • Biofuels
  • Efficiency/Enabling
  • Smart Grid
  • Solar
  • Wind

A complete overview of the clean tech sector in the U.S. and information about the Green Tech division of Peachtree Media Advisors, Inc. can be found on the division’s Web site:  www.PeachtreeGreenAdvisors.com.

“I launched this group not only because green tech is one of the most important verticals in our lifetime, but it has always been a passion of mine.  Including when I was an Engineering major at Dartmouth working on regenerative braking systems for solar cars and trucks.  I can now work with many of these innovative entrepreneurs to help them raise capital and maximize value in the M&A process.”

John H. Doyle II, Managing Director & Founder,
Peachtree Media Advisors, Inc.


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