In the first eight months of 2010, there were 206 cleantech mergers, acquisitions, and capital raises--totaling $10.2 billion in reported deal value, according to a new market report.
Peachtree Green Advisors said while the 206 transactions were only slightly more than the 183 recorded during the same period in 2009, deal value grew 73% over the year-ago figure of $5.9 billion.
The uptick in M&A activity is a welcome relief after a dismal year in 2009 which reported only $9.5 billion in deal value--a number that has already been surpassed in 2010. The increased dealmaking signals that capital is steadily flowing into the greentech sector again.
More importantly, debt is returning to the greentech sector as well. Debt is the catalyst for acquisitions, which leads to exits for investors and attracts more investors, as well as a driver of capital spending, which leads to increased revenue. This inflow of capital and debt paints a positive outlook for greentech M&A going forward, according to the advisor group.
Solar leads in transaction value, up 92% year-over-year to more than $2 billion. First Solar’s (Nasdaq: FSLR) $285 million acquisition of NextLight Renewable Power continued a trend of upstream players buying downstream targets, while four companies raised rounds in excess of $100 million, both in solar photovoltaic and solar thermal.
Solar was followed by wind, biofuel and biomass. Smart energy distribution showed the biggest year-of-year change, up more than 1,100% to more than $1.1 billion.
Through August, 170 capital raises were reported for a total of $7.5 billion; these figures were respectively 24% and 123% higher than in the same period for 2009. Distribution, storage & efficiency drew the most attention from investors and its 74 raises accounted for 44% of all capital raise volume.
The report, which is available as a free pdf, lists the twenty largest transactions by deal value that have occurred thus far in 2010, led by Terra-Gen Power’s massive $1.2 billion round of financing and ABB’s $1 billion acquisition of Ventyx. The report also gives detailed valuations of public companies across the cleantech sector, such as GT Solar (Nasdaq: SOLR), Evergreen Solar (Nasdaq: ESLR), Broadwind Energy (Nasdaq: BWEN), Ocean Power Technologies (Nasdaq: OPTT) and many others.
Disclosure: No positions