M&A International Inc. Alternative Energy M&A - Western Reserve ...

1 Industry M&A Overview eTailing M&A: High Level of Activity Despite Economic Downturn 

M&A International Inc. 

Alternative Energy M&A: Seeds of Change 

June 2010 

June 2010 

www.mergers.net 

M&A International Inc. – the world's leading M&A alliance

Overview of Western Reserve Partners 

Western Reserve Partners LLC, based in Cleveland, Ohio, is a leading investment banking firm dedicated to providing customized solutions and 

unparalleled results to the premier companies in the middle market. 

Clients benefit from our focused approach to financial advisory services, including: 

Mergers & Acquisitions 

Capital Raising 

• Sales and Divestitures 

• Acquisitions 

• Mergers, Joint Ventures and Strategic Partnerships 

• Operating Partnership (“O.P.”) Unit Exchanges 

• Refinancing and Recapitalization 

• Growth Capital and Acquisition Financing 

• Special Situation Financing 

• Credit Tenant Lease (“CTL”) Transactions 

• IPO Advisory 

Restructuring & Bankruptcy 

Financial Opinions & Valuation Services 

• Identifying and Analyzing Strategic Alternatives 

• Refinancing or Replacement of Existing Indebtedness 

• Raising of Additional Capital 

• Out-of-Court and Section 363 Sales 

• Advisory Services in Chapter 11 Cases 

Global Reach 

• Fairness Opinions 

• Solvency Opinions 

• ESOP Opinions 

• Valuation Opinions 

Western Reserve’s professionals have completed more than 35 corporate finance transactions involving non-U.S. companies, primarily from Europe 

and Asia. Two of our managing directors have worked as expatriate executives, providing them direct understanding of the nuances of international 

business practices. Furthermore, members of our staff speak French, German, Italian, Russian and Spanish. 

Western Reserve believes that access to international purchasers, sellers and 

investors is fundamental to maximizing value for our clients. This is why we are 

members of M&A International Inc., the world’s premier international alliance 

of investment banking firms. This network provides us with direct access to 

corporate buyers and investors outside the U.S., where culture, language and 

time zone differences play significant roles in transaction processes and 

outcomes. M&A International is comprised of more than 500 M&A professionals 

working in 41 countries, and in 2010, M&A International’s 47 members 

completed more than 364 transactions collectively worth $9.2 billion. 

M&A International Member Offices 

For more information, please contact: 

Joseph G. Carson 

Managing Director 

Phone: 216.574.2102 

jcarson@wesrespartners.com 

Mark A. Filippell 

Managing Director 

Phone: 216.589.9532 

mfilippell@wesrespartners.com 

Kevin J. Mayer 

Director 

Phone: 216.574.2117 

kmayer@wesrespartners.com 

M&A International Inc. - the world's leading M&A alliance

1 Alternative Energy M&A 

Table of Contents 

Executive Summary 2 

M&A activity at record high 2 

M&A drivers 2 

Future M&A prospects 2 

Growth in Alternative Energy 3 

Regulatory pressure: “push” policy 3 

Incentives: “pull” policy 3 

Evolving economics 3 

Technological advancements 3 

M&A Overview & Analysis 4 

Alternative energy M&A volume share increasing 4 

Operational assets attractively valued 4 

Top M&A targets 5 

Operational vs. technology companies 5 

M&A Deal Makers 6 

Pure plays seeking economies of scale 6 

Utilities increasing alternative energy exposure 6 

Private equity and institutional investors diversify their portfolios 6 

“Other” buyers expect sustainability 7 

Initial Public Offerings (IPOs) 7 

M&A Trends & Opportunities by Region 7 

European transactions leading M&A 8 

Tailwinds for M&A in North America 9 

M&A gaining traction in Asia/Pacific 9 

Representative Transactions 11 

Transactions involving acquisitions by pure players 11 

Transactions involving acquisitions by utility companies 12 

Transactions involving private equity and other financial buyers 13 

Private placements 14 

Transaction Case Studies 15 

Conclusions 16 

About M&A International Inc. 16 

M&A International Inc. Energy Specialists 17 

M&A International Inc. Representative Transactions 18 

June 2010 



Executive Summary 

World energy markets are in the midst of a paradigm 

shift away from heavy dependence on hydrocarbons 

in favor of a diversified portfolio of energy sources 

where renewable energy, which accounted for 4.4% 

of global energy production in 2008, will have a 

major role. This share will increase rapidly in the next 

few years, driven by a shift in market focus by both 

the private and public sectors. For instance, in 2009 

power generation investment in alternative energy 

exceeded investments in traditional fossil-fuel 

powered generation for the second consecutive year. 

Moreover, government-backed initiatives have also 

increased with $180bn mandated in renewable 

energy related programs in the period 2008–2009. 

To benefit from the growing importance of renewable 

energy, industry players have actively increased their 

renewable portfolios using M&A to buy capacity and 

integrate horizontally and vertically. 

M&A activity at record high 

Rapid expansion and increasing investments have 

been the catalysts behind a high level of M&A 

activity in the sector. Since 2007, M&A in the 

renewable energy space has grown significantly (at a 

CAGR of 19%) led mainly by utilities and pure-play 

companies trying to increase their presence in 

renewable power generation. Pure-play companies 

have emerged as the leading deal makers, 

accounting for 40% of the M&A deal volume between 

2007 and 2009. Wind energy has been the most 

active sector, accounting for the majority of both deal 

volume (66%) and deal value (77%). Regionally, 

Europe has been the most active, accounting for 

64% of target companies and 80% of total deal value. 

During the credit crisis, valuations fell as a result of 

the market sell-off. Despite this, deal volumes 

continued to grow throughout the crisis. While we 

believe that the growth in M&A since 2008 has been 

highly strategic, attractive valuations have 

contributed to deal flow. In addition, M&A, joint 

ventures and strategic alliances between renewable 

power generators and their supply chain partners 

have increased due to rapid growth in new projects, 

which in turn has required a more integrated 

relationship between the two. 

M&A drivers 

Increased M&A activity has been driven by the 

actions of three key company types seeking to 

capitalize on the market’s focus on renewables: 

(i) Pure-play alternative energy companies (2007– 

2009: 40% of deal volume) attempting to access 

June 2010 

parts suppliers to scale the value chain and augment 

their operational asset base. Increasingly, these 

market participants are also acquiring other 

operational companies to expand activities and 

benefit from economies of scale. 

(ii) Power utilities (2007–2009: 26% of deal volume, 

the largest share by deal value) increasing their 

alternative energy exposure to meet governmentmandated 

targets prescribing the source of power 

generation. Some larger utility companies are 

pursuing backward integration by acquiring globallyactive 

companies engaged in developing and 

manufacturing alternative energy assets. 

(iii) Acquisitions by institutional investors or private 

equity funds (2007–2009: 18% of deal volume) are 

increasing as firms seek to diversify their holdings 

and invest in more sustainable businesses. 

18% 

Figure 1: M&A deal volume by deal type* 

16% 

40% 

Pure Play 

Utility 

Finance/PE 

Other 

26% 

Source: Copal Analysis, Capital IQ 

* Based on top 50 deals by deal value for each year (2007–2009) 

Future M&A prospects 

We expect future M&A activity within the sector to be 

largely policy driven. While large traditional power 

generators will need to expand their renewables 

footprint in order to meet their emission-reduction 

targets, pure-play generators see an opportunity to 

build sustainable businesses with government 

support via subsidies and incentives. 

Highlighting this trend, more countries have either 

mandated or expanded their renewable energy 

targets recently. For example, under the American 

Recovery and Reinvestment Act of 2009, the US 

government has greatly expanded grants, R&D and 

rebates focused on renewable technologies, and has 

also sanctioned programs with a total value of $10bn. 

The geographical expansion of the European Union 

(EU) and its push for renewal energy will further 

increase demand for renewables, as countries take 

steps to comply with EU regulations and create a 

common market with standardized investment and 

power generation norms. This development should 

provide an opportunity for companies to establish a 

single market presence throughout Europe. 



With Asian demand for energy growing rapidly, 

greater interest in these markets should increase 

overall deal volume. China and India are seeking to 

follow the example set by Brazil and reduce their 

reliance on imported energy by diversifying their 

asset bases to incorporate more renewables. 

“We believe M&A activity will accelerate across 

the value chain, from manufacturing to service to 

maintenance, and will create sustainable 

alternative energy companies that thrive with 

much reduced government support.” 

Growth in Alternative Energy 

The outlook for alternative energy is very positive, 

with the sector generally continuing to expand 

despite the global economic crisis. Investments in 

renewable energy generation projects rose 13% in 

2008 to $117bn while new private investment in 

companies developing new technologies has 

increased by 37% since 2007 to $13.5bn. 

Furthermore, 2008 marked the first time that power 

generation investment in renewables exceeded 

investment in fossil-fueled generation. 

Growth drivers 

Regulatory pressure has been the main driver for the 

alternative energy sector, although more recently 

incentives have become increasingly important. The 

four key growth drivers are as follows: 

(i) Regulatory pressure: “push” policy 

Several countries have introduced specific targets 

concerning the share of future energy supplies that 

must be derived from alternative energy sources. For 

example, the EU has set a corresponding target of 

20% by 2020, which will require major changes to 

current practice as the region currently meets only 

7% of its energy requirements from renewable 

sources. Some industry observers believe that in 

order to achieve such a target on schedule, a further 

$2tn in investments will be required over the next 

decade. In practice, this implies the construction of 

over one million windmills or the installation of 

sufficient solar panels to cover an area twice the size 

of Belgium. 

This regulatory policy is being implemented through 

the use of Renewable Portfolio Standards (RPS or 

TCS, as part of the Tradable Certificate System 

operating within the EU), a mechanism requiring 

electricity chain stakeholders to purchase a 

percentage of electricity from renewable energy 

resources. This, in turn, encourages significant 

June 2010 

alternative energy capacity additions by both utility 

and non-utility companies. For example, in the US 

the current RPS is 15% of the total energy supply by 

2015, a target likely to be revised to 25% once the 

current objective is achieved. This implies that 

almost 70% of additional generating capacity in the 

US will come from alternative sources. This trend is 

global, with at least 44 countries having similar RPS 

policies. 

(ii) Incentives: “pull” policy 

While mandating the adoption of alternative energy 

by regulation, governments have also 

simultaneously introduced various incentives to 

encourage investment. For example, capital 

subsidies usually account for 30–50% of installed 

costs, significantly reducing initial investments 

required by an investor to establish an alternative 

energy plant. In one form or another, direct capital 

investment subsidies, grants and rebates are offered 

in at least 35 countries. Several states have also set 

aside special renewable energy funds to be used to 

directly finance investments and provide low-interest 

loans for projects. In addition, tax incentives and 

credits reduce expenses once a plant becomes 

operational. 

Another popular and highly successful incentive to 

boost investment in the sector is the use of feed-in 

tariffs which guarantee alternative energy producers 

a long-term off-take agreement at a pre-determined 

price. Such agreements significantly reduce 

investment risks involving the alternative energy 

sector. Approximately 45 countries worldwide 

operate feed-in tariffs to promote renewable power 

generation. 

(iii) Evolving economics 

Marginal cost inflation in the oil & gas industry will 

remain a major catalyst for the adoption of 

alternative energy resources. As marginal costs and, 

consequently, end-user prices rise, the use of 

renewable sources becomes more economically 

attractive. Given the steady decline in hydrocarbon 

reserves and increasing production, it is apparent 

that world energy demand is growing at a rate that 

requires alternatives, such as wind, solar, biomass, 

fuel cells, etc. to be extensively included in the fuel 

mix in the coming decade. 

(iv) Technological advancements 

Technological advances will play a key role in 

determining the renewable energy sector’s 

development, particularly the extent of government 

development incentives and the degree to which 



costs may fall due to technological innovation and 

economies of scale. Technological advancements 

continue to cause the marginal cost of renewables to 

decline, while non-renewables continue to see 

marginal cost inflation. 

M&A Overview & Analysis 

Rising M&A deal volumes highlight buyer interest in 

the sector with volumes growing at a CAGR of 19% 

over the past three years. At the same time, total 

deal value fell steadily at a CAGR of 25%, implying a 

gradual correction in valuations following the recent 

credit crisis. 

$bn 

Figure 2: Value and volume of M&A transactions 

20 

15 

10 

5 

0 

June 2010 

132 

132 

187 

200 

150 

100 

50 

18.2 15.4 10.2 

0 

2007 2008 2009 

Total Deal Value No. of Deals 


No. of Deals 

2009 witnessed a record number of M&A deals in the 

alternative energy sector as deal volume reached a 

three-year high. This increase is attributable to two 

key factors: 

(i) A favorable shift in the regulatory environment and 

the proposed increase in government spending in 

the alternative energy sector as a result of stimulus 

spending. 

(ii) Valuations corrected sharply in 2009, making 

growth through acquisition a more feasible strategy. 

This prompted various buyers to acquire already 

operational assets at discounted prices. 

We expect these factors to continue to drive M&A 

activity in the near future. In addition, since the credit 

crisis, financial investors have been eager to invest 

in alternative energy based on its sustainability and 

stable cash flows. 

Alternative energy M&A volume share 

increasing 

In 2009, alternative energy transactions accounted 

for a record 30% of total M&A deals in the utility 

sector, compared to 21% in 2008 (Figure 3). In 

absolute terms, the total volume of overall power 

deals has declined, while for the alternative energy 

sector it has increased. The steady growth in the 

alternative energy sector’s share of M&A deals 

illustrates its growing importance in the energy mix in 

the future. 

Figure 3: Alternative energy M&A deal volume: % 

of total power deals 

No. of Deals 

700 

600 

500 

19% 21% 

30% 

661 627 619 

400 

2007 2008 2009 

Total Utility Deals Alt. Energy Deals Share 


Operational assets attractively valued 

Over the past three years, deal valuations involving 

solar companies have fluctuated slightly. However, 

in the case of wind companies, variations have been 

much greater (Figure 4). During the recent credit 

crisis, deal valuations fell as the impact of 

decreasing energy consumption and falling carbon 

prices (2008–2009: EU prices fell from around 

€30/ton to approximately €15/ton) weakened 

fundamentals and reduced the viability of various 

alternative energy projects. 

8 

6 

4 

2 

0 

Figure 4: Transaction value ($mn)/MW * 

1.4 

6.5 

2.1 

6.3 

1.0 

2007 2008 2009 

Wind 

Solar 

5.5 



However, transaction volumes increased to 187 in 

2009 from 132 in 2007, their highest level in three 

years. We believe that higher M&A volumes have 

been driven by industry players’ recognition of the 

commercial and strategic logic of acquiring 

alternative energy assets, which has been further 



facilitated by a rapid correction in valuation multiples. 

For example, the mean implied value/MW multiple 

for transactions involving wind assets peaked at 

$2.1mn/MW in 2008 before falling sharply to 

$1.0mn/MW in the following year. With various largescale 

projects and smaller companies restricted by 

limited cash resources, this development created key 

opportunities for well-capitalized companies to 

acquire attractive projects and other participants at 

reasonable valuations. 

Top M&A targets 

Wind energy has now emerged as the most popular 

alternative energy asset, being the most cost 

effective and scalable alternative source of energy. 

Between 2007 and 2009, wind accounted for the 

largest share of alternative energy sources in terms 

of both deal volume (66%) and value (77%) (Figure 

5). In particular, wind deals have found traction in 

several countries including Spain, Germany, France 

and the US, and more recently India and China. 

Wind power has benefited from the introduction and 

extension of subsidies and production tax credits as 

well as expansion in the construction of new largescale 

projects by both utilities and governments. 

Such growth has been exerting pressure on the 

supply chain which, in turn, is stimulating interest in 

M&A activity and the development of joint ventures 

and strategic alliances. 

$bn 

40 

30 

20 

10 

Figure 5: Total deal value and volume split 

by type of target (2007–2009) 

0 

301 

33.9 

75 

2.5 

50 

1.2 

25 

6.2 

Wind Solar Biomass Diversified 

Total Deal Value 


No. of Deals 

The solar sector faces a similar supply chain 

constraint as shown by the sudden increase in deal 

activity in 2009. During the same period, the number 

of deals almost tripled while deal value rose by 

around 400% compared with the previous year. 

Average deal value also increased from $49mn in 

2008 to $119mn in 2009, supported by both 

regulatory and technological factors. For example, 

France (targeting 4.9 GW of solar PV by 2020), 

Spain and Japan have introduced solar energy 

targets. Technological innovations such as thin-film 

solar cells will help improve the economics of solar 

energy. We therefore expect solar activity to 

increase its share of total M&A activity from its 

current 23%. 

Biomass represents an increasing share of M&A 

activity, accounting for 11% of deal volume and 

nearly 3% of total deal value. More recently, biomass 

deals have become increasingly concentrated in the 

developing markets of Asia/Pacific, particularly in 

India, China, the Philippines and Thailand due to 

their thriving agriculture industries and the availability 

of higher agricultural residues for biomass power 

plants. 

“We see highly innovative businesses that are 

addressing the challenges facing the industry 

over the next decade. Venture capital companies 

are already incubating these companies and will 

set the stage for M&A activity later this decade. 

These companies are addressing next 

generation challenges, such as higher power 

efficiency, better industrial and consumer 

solutions, low carbon utility plants, cellulosic 

biofuels, utility-scale carbon capture and 

sequestration projects, smart grid and new 

battery technology, and better ergonomics.” 

Operational vs. technology companies 

Technology acquisitions represent a significant 

component of alternative energy M&A (Figure 6), 

and highlight the extent to which companies are 

seeking to acquire manufacturing and technology 

assets higher up the alternative energy value chain. 

The solar sector remains the subject of acquisitions 

by larger, cash-rich technology companies as 

participants face falling product prices and 

constrained finances. This situation, in turn, creates 

key opportunities for major industrial groups to 

extend their operations into the renewables value 

chain. Separately, large utility companies including 

E.ON, EDP and Scottish and Southern Electricity are 

increasingly acquiring wind-energy developers and 

operators. In such cases, these purchases are 

undertaken by companies seeking to secure an endto-end 

supply chain footprint. This trend is also 

driven by increasing interest from industrial groups 

and investment funds seeking to increase their 

sector exposure. 

June 2010 



20% 

% Share by Deal 

Volume 

Operational 

Technology 

80% 

23% 

% Share by Deal 

Value 

Operational 

Technology 

77% 



M&A Deal Makers 

While utilities have accounted for the largest share of 

deal value, deal volume is currently driven by pureplay 

companies. 

18% 

Figure 6: Target analysis: operational vs. 

technology companies 

Figure 7: M&A deal volume by deal type 

(percentage deal value share)* 

16% 

40% 

Pure Play (12%) 

Utility (47%) 

Finance/PE (23%) 

Other (18%) 

26% 



Pure plays seeking economies of scale 

Between 2007 and 2009, pure-play alternative 

energy companies accounted for 40% of total deal 

volume and 12% of total deal value. Most 

acquisitions by pure-play companies occurred in the 

US and Western Europe. Such transactions usually 

involved participants acquiring smaller companies to 

expand both their generation capacity and 

geographical footprint. In addition, the target scope 

for pure-play companies was substantially more 

diversified, unlike utilities, which are more heavily 

focused on acquiring wind energy companies. In 

2009 in particular, pure-play companies 

demonstrated a greater interest in acquiring 

companies to diversify their energy mix and help 

provide integrated energy services. 

As a result, pure-play companies with operational 

assets are acquiring technology companies or 

manufacturers to secure a pan-sector end-to-end 

renewable energy footprint, e.g. last year’s 

acquisition by Pirelli Ambiente S.p.A., an alternative 

fuel producer, of Solar Utility S.p.A., a solar PV 

technology developer and operator, for $12mn. 

Utilities increasing alternative energy 

exposure 

Between 2007 and 2009, utility companies 

comprised 26% of total M&A volume and 47% of 

total deal value. These transactions were driven by 

utilities trying to increase their portfolio exposure to 

renewables as well as attempting to acquire new 

technology or manufacturers and developers of 

alternative energy assets. For example, last year’s 

acquisition by International Power plc, a UK-based 

utility company of AIM PowerGen Corporation, a 

developer and manufacturer of wind power 

generation facilities in Canada, for $120mn, 

highlighted this trend. 

Wind assets have been the preferred acquisition 

target of utility companies due to their lower 

acquisition costs and the availability of production 

tax credits in many regions. Over the next 10 years, 

we believe that utility companies will continue to 

account for a significant share of total M&A activity 

due to requirements to satisfy Renewable Portfolio 

Standards. Furthermore, as solar plants increase 

their production scale and technological advances 

lower costs, solar targets are likely to represent a 

larger share of total M&A activity. 

Private equity and institutional investors 

diversify their portfolios 

Private equity, venture capital and other institutional 

investors have accounted for 18% of total deal 

volume and 23% of overall deal value in the 

alternative energy sector over the past three years. 

The percentage share of private equity and 

institutional investors in total deal value has fallen 

sharply since 2007 although we expect a change as 

institutional investors seek to increase their sector 

exposure. 

Private equity and financial investors were also 

responsible for over 80% of private placements 

during the same period. Between 2007 and 2009, a 

total of 171 private placements were made by wind, 

solar and biomass companies (Figure 8) with an 

average deal value for private placements of around 

$33.3mn. 

June 2010 



Figure 8: Private placement: deal value & volume 

$mn 

2,500 

2,000 

1,500 

1,000 

500 

0 

June 2010 

43 


62 66 

75 

60 

45 

30 

15 

1,020 2,138 1,534 

0 

2007 2008 2009 

Total Deal Value No. of Deals 

No. of Deals 

In part, private equity has offset the shortfall in 

activity resulting from highly adverse public market 

conditions in which significantly lower share prices 

handicapped company efforts to raise additional 

capital. As a result, several cash-strapped 

companies have resorted to private placements to 

meet their financing requirements. In addition, 

financial investors are responsible for several 

renewable energy investments in the form of carbon 

funds due to an expected increase in the price of 

carbon credits by 2012 on expiry of the first 

commitment period for the Kyoto Protocol. With the 

economic recovery taking hold, private equity and 

other financial investors should seek to diversify their 

portfolios and increasingly invest in nascent 

alternative energy companies and projects, e.g. in 

February 2010, HgCapital, a London-based PE firm, 

acquired a new 12 MW PV project in Castilla La 

Mancha, Spain for $139.1mn. 

“Other” buyers expect sustainability 

More recently, M&A in the alternative energy sector 

has also been characterized by significant activity 

originating from companies in industries as diverse 

as infrastructure, real estate, chemicals and 

manufacturing. Such buyers have accounted for 16% 

of deal volume and around 18% of deal value over 

the past three years, although they comprised as 

much as 45% of deal value in 2009. Growing interest 

in the sector from companies in unrelated industries 

suggests that renewable energy is increasingly 

regarded as an attractive business opportunity rather 

than simply a regulatory mandate. 

Initial Public Offerings (IPOs) 

Between 2007 and 2009, a total of 74 IPOs occurred 

with an average issue size of $269mn. The number 

of alternative energy IPOs has declined by more 

than 50% in each of the past two years, reflecting 

subdued IPO markets during the credit crisis and 

generally adverse market conditions for alternative 

energy companies raising money in the public 

market due to their limited track record and high 

technology-related risks. Nevertheless, one of the 

largest alternative energy deals in 2008 was the 

$2.8bn placement with institutional investors of a 

25% stake in EDP Renováveis. 

This transaction shows a common trend with large 

utility companies including EDF, Iberdrola and EDP 

listing their renewable energy subsidiaries as 

separate units. This process is intended to ensure 

adequate capital to expand each company’s 

alternative energy portfolio while their parent focuses 

on replacing aging infrastructure and modernizing its 

operations. Pure-play companies active in the wind, 

solar and biomass sectors account for low IPO 

volumes compared to the total number of M&A deals 

and private placements over the last three years. 

“Renewable energy companies will have a 

continual need for growth financing to build their 

companies. The vast majority will seek a liquidity 

event to monetize the substantial investment 

through merger, buyout or public equity offering. 

Whether by a desire to lead or adherence to 

government policy, strategic companies will 

continue to seek ways to offset their carbon 

emissions, providing a consistent demand for 

well-positioned companies.” 

M&A Trends & Opportunities 

by Region 

Figure 9: Total deal value and volume by region 

$bn 

40 

30 

20 

10 

0 

290 

95 54 

35.0 6.9 1.5 

Europe North America Asia Pacific 

Total Deal Value 


No. of Deals 

Over the past three years, alternative energy deals 

have been increasingly concentrated in Europe, with 

the region accounting for the largest share of deal 

volume (290) and deal value (80%). North America 



saw 95 transactions over the same period, equal to 

21% of total deal volume. 

Unsurprisingly, M&A activity has flourished in these 

two regions as they represent the world’s most 

mature energy markets and also provide major 

support for alternative energy through governmentbacked 

incentive schemes. 

European transactions leading M&A 

Europe has been the regional leader in alternative 

energy M&A activity. Average deal value remains the 

highest in the world. Although average deal value 

corrected slightly in 2009, the recession had no 

affect on total M&A deal volume (Figure 10). 

Between 2007 and 2009, some 64% of target 

companies in all M&A deals were European, of 

which 65% were wind companies, 19% solar, 10% 

biomass and 6% diversified. 

$mn 

Figure 10: Europe – average deal value and 

volume 

400 

300 

200 

100 

0 

June 2010 

86 

97 

107 

125 

100 

75 

50 

25 

300 322 229 

0 

2007 2008 2009 

Average Deal Value No. of Deals 


No. of Deals 

Deal flow was concentrated mainly in Western 

Europe with Spain, Germany, France, Italy and the 

UK comprising 73% of all regional M&A deals 

(Figure 11). This is consistent with the fact that these 

countries also account for the largest share of 

alternative energy generation capacity in the EU. 

27% 25% 

Spain 

8% 

Figure 11: European deals by country 

10% 

10% 


20% 

Germany 

France 

Italy 

UK 

Others 

The European utility market has been consolidating 

for several years, and the alternative energy sector 

will likely be no different. In 2009, the largest M&A 

deal was Spain-based Acciona S.A.’s $3.6bn 

acquisition of Endesa’s renewable energy assets 

totaling 2,105 MW (1,248 MW of wind power). The 

deal was primarily motivated by ongoing 

consolidation within the EU. With Europe slowly 

moving towards greater interconnectivity and a 

liberalized common energy market, some larger 

utility and infrastructure companies prefer to 

maintain a diversified energy portfolio according to 

source and geography. This key trend will continue 

to drive M&A activity between EU member states. 

M&A activity within the region is also being 

motivated by regulatory provisions. The Kyoto 

Protocol, and subsequent market mechanisms 

governed by it, will probably serve as the strongest 

catalyst for regional M&A activity. The EU has 

implemented a Tradable Certificate System under 

which electricity chain stakeholders are obliged to 

purchase a percentage of their electricity from 

renewable energy resources. Certificates can be 

obtained either from each stakeholder’s own 

renewable electricity generation or from another 

generator. Subsequently, this process has driven 

regional M&A activity. Acquirors have either followed 

an investment-focused strategy, making acquisitions 

that benefit from tax credits and selling certificates, 

or pursued generation-based strategies executed in 

order to diversify the generation portfolio, alleviate 

the necessity to buy certificates from outside and 

position themselves to benefit from the feed-in tariff 

mechanism. 

For example, one of the largest such deals in 2008 

was the $3.3bn investment-focused acquisition of 

Irish-based Airtricity, a developer, manufacturer and 

operator of wind farms in Europe and Asia, by 

Scottish and Southern Energy (SSE). The 

transaction was intended to support the SSE 

development of the 500 MW Greater Gabbard 

offshore wind farm, the world’s largest, currently 

under construction. 

We therefore expect extensive consolidation activity, 

motivated by the EU objective of establishing a 

single energy market together with other investment 

and generation-focused strategies to continue to 

drive regional M&A activity. The Iberian Peninsula 

and the North Sea are a likely focus of this activity, 

with their considerable potential to generate wind 

and solar energy. 

“We see continued government support for the 

alternative energy industry over the foreseeable 



future, both to ensure a reliable alternative to 

declining, higher-risk fossil-based sources as 

well as diversifying away from politically 

unpopular sources.” 

Tailwinds for M&A in North America 

M&A deal volume in North America (US and 

Canada) accounted for 21% of all M&A deals 

between 2007 and 2009. A combination of low 

interest rates, relaxed lending standards and 

regulatory changes drove average deal values to a 

three-year high in 2007. One of the largest 

alternative energy deals in the US occurred in 2007 

when Horizon Wind Energy was acquired by EDP - 

Energias de Portugal for $2.3bn. This deal 

possessed similar characteristics to the Airtricity 

acquisition with Horizon Wind Energy, acting as a 

developer and operator of wind farms in North 

America being acquired by a utility company. 

$mn 

Figure 12: North America – average deal value 

and volume 

300 

200 

100 

0 

June 2010 

60 

49 

45 

30 

30 

16 

15 

266 45 102 

0 

2007 2008 2009 



No. of Deals 

With the onset of the credit crisis in 2007, deal 

valuations fell markedly. However, transaction 

volumes remained high. The sudden increase in deal 

volume from 16 in 2008 to 49 in 2009 (Figure 12) 

occurred against a background of accelerated 

growth in the US renewable energy sector as the 

industry benefited from government stimulus 

measures and tax incentives for investment. 

To encourage the adoption of alternative energy, the 

US has implemented RPS legislation – Production 

Tax Credit (PTC) and Investment Tax Credit (ITC) 

(the equivalent of the EU’s Tradable Certificate 

System) – which enable wind and solar energy 

producers to claim tax credits for a period of 10 

years from the start of production. 

The recent extension of tax credits to 2012 and the 

possible introduction of RPS at federal level have 

increased M&A volumes with both utilities and nonutility 

companies keen to benefit from such 

regulatory changes. For example, last year MEMC 

Electronic Materials Inc., a designer and 

manufacturer of silicon wafers, acquired Sun Edison, 

an owner and operator of solar power plants, for 

$317.6mn. The current regulatory environment 

optimized conditions enabling MEMC to vertically 

integrate and benefit from Sun Edison’s renewable 

portfolio standards and solar tariff services. 

However, to capitalize on available tax advantages, 

the developer and/or other investors in the 

renewable energy project must have sufficient future 

cash tax liabilities to efficiently realize the economic 

value of those incentives. US tax incentive programs 

make it more challenging for smaller or start-up 

companies to develop renewable energy projects. 

The current economic climate has also significantly 

reduced the number of traditional investors with 

sufficient tax motivation to take advantage of the 

benefits of these incentive programs. This situation 

has contributed to a rise in deal volumes while 

restricting the average deal value, with many smaller 

players now concluding deals and partnerships with 

larger companies. 

Furthermore, President Barack Obama has 

proposed clean energy investments and regulatory 

changes worth over $60bn, designed to encourage 

growth in the US renewable energy industry which, 

in turn, should also drive regional M&A activity. 

“We will continue to see a favorable political 

environment to creating sustainable domestic 

sources of alternative energy. New economic 

incentives will be added over the next decade 

that favor large leaps in innovation, 

infrastructure build out, smart grid technology 

and development of sustainable resources.” 

M&A gaining traction in Asia/Pacific 

M&A volume in the Asia/Pacific region accounted for 

12% of all M&A deals between 2007 and 2009. 

While deal volume in Asia/Pacific has increased 

steadily, average deal value has remained relatively 

small, excluding 2007 (Figure 13) when average 

deal value was higher due to the $511.8mn 

acquisition of Yunnan Shenyu New Energy 

Company, a Chinese-based biomass energy 

producer, by China Grand Forestry Green 

Resources, an investment holding company 

manufacturing forestry products. 

Australia and Japan have lagged behind the rest of 

the region, accounting for only 28% of deals (Figure 

14), well behind other developed countries. Demand 



$mn 

Figure 13: Asia/Pacific average deal value 

and volume 

125 

100 

75 

50 

25 

0 

12 

15 

27 

40 

30 

20 

10 

106 27 26 

0 

2007 2008 2009 



No. of Deals 

for alternative energy in Japan has been low while 

investment in the sector is limited, restricting M&A 

activity. However, former Prime Minister Yukio 

Hatoyama’s government has significantly enhanced 

Japan’s emission reduction targets for 2020, which 

we expect will stimulate sector activity. In the 

meantime, significant investment interest is focused 

overseas. 

Figure 14: Asia/Pacific targets split by country 

photovoltaic (PV) cells, with established incentive 

policies to stimulate domestic demand and 

deployment including feed-in tariffs. In July 2009, 

China imposed a feed-in tariff for new onshore wind 

power plants, providing wind energy generators with 

a significant premium over the average rate paid to 

coal-fired electricity generators. India recently added 

a new renewable portfolio standard for utilities, 

starting at 5% in 2010 and increasing by 1% each 

year to 15% in 2020. 

Positive regulatory changes in China and India have 

resulted in a steady increase in regional M&A activity. 

Deal value for most transactions in these countries 

has been less than $10mn. The largest transaction 

during the past three years was the 2009 acquisition 

of India-based independent power producer Green 

Infra Ltd. by BP Energy India Pvt. Ltd. for $95.8mn. 

Population growth, urbanization (including a 

concomitant wealth effect) and high GDP growth will 

continue to increase energy requirements by Asian 

countries and stimulate investments in alternative 

energy. This region will account for an increasing 

proportion of both deal flow and deal value in the 

future. 

15% China 

11% 

37% 

India 

Australia 

17% 

20% 


Japan 

Others 

However, M&A activity in Australia has stalled partly 

due to uncertainty concerning a carbon trading 

scheme being introduced by the government led by 

Prime Minister Kevin Rudd. The renewables sector 

in Australia has also been affected by an artificial 

increase in the supply of renewable energy 

certificates which dramatically reduced their price in 

2009, acting as a disincentive for utilities to conclude 

longer-term power purchase agreements for 

renewable generation. 

Despite these headwinds, there has been abundant 

M&A activity in the sector due to strong demand from 

both China and India which accounted for 57% of 

deals within the region between 2007 and 2009. 

China and India have taken principal roles in the 

development of alternative energy technologies. 

Both are world leaders in the manufacture of 

June 2010 



Representative Transactions 

Transactions involving acquisitions by pure players 

Date 

Announced 

16-Jul-09 

16-Sep-09 

21-Oct-08 

08-Apr-08 

05-Dec-07 

14-Feb-07 

Target Acquiror Deal Synopsis Value 

($mn) 

Gamesa 

Corporación 

(six wind farms 

in Spain) 

BP Energy 

India Private 

Limited (India) 

New Green 

Molise (Italy) 

NEO Galia, 

S.A.S. 

(France) 

Gamesa 

Corporacion, 

(two wind 

power parks) 

(Spain) 

GE Energy 

Financial 

Services (165 

MW wind 

farms in 

Germany) 

Gestamp 

Eólica S.L. 

(Spain) 

Green Infra 

Ltd. (India) 

Alerion 

Energie 

Rinnovabili 

s.r.l. (Italy) 

Novas 

Energías do 

Ocidente, 

S.A. (Spain) 

Iberdrola 

Renovables 

S.A. (Spain) 

Theolia S.A. 

(France) 

Six wind farms in Galicia and Catalonia, Spain, owned by 

Gamesa Corporación Tecnológica S.A., with a capacity of 

132 MW were acquired by Gestamp Eólica S.L., a wind 

power energy company which promotes, constructs and 

operates wind farms in Spain and internationally, and also 

(through its subsidiary) makes towers used for wind power 

generator turbines. 

BP Energy India Private Limited owns and operates wind 

farms in India with a total power generating capacity of 

around 100 MW. The company was incorporated in 2005 

and is based in Bengaluru, India. As of 16 September 2009, 

BP Energy India Private Limited operates as a subsidiary of 

Green Infra Ltd. 

New Green Molise owns rights for the construction and 

management of a 72.5 MW wind farm. The company is 

based in Pensilis, Italy. As a result of a deal announced on 

21 October 2008, New Green Molise operates as a 

subsidiary of Alerion Energie Rinnovabili s.r.l. 

NEO Galia, S.A.S. owns and operates three wind farms in 

Normandy with an installed capacity of 35 MW. The 

company is based in Paris, France. NEO Galia, S.A.S. now 

operates as a subsidiary of Novas Energías do Ocidente, 

S.A. Novas designs, builds and operates projects to produce 

electricity from renewable sources in the Iberian Peninsula 

and Europe. 

On 5 December 2007, two wind farm parks in Southern 

Almeria, Spain, owned by Gamesa Corporacion 

Tecnologica, were acquired by Iberdrola Renovables. Both 

are electric power generation facilities producing electric 

power through wind energy with an installed capacity of 50 

MW. 

On 2 July 2007, 165 MW wind farms based in Germany and 

owned by GE Energy Financial Services, were acquired by 

Theolia. Theolia S.A. operates as an independent producer 

of mainly wind-generated renewable electricity. The 

company develops, builds and operates wind farms for its 

own account and for third parties. As of 31 December 2008, 

the company managed a total installed capacity of 671 MW, 

comprising 360 MW on its own account and 311 MW for 

third parties. Theolia S.A. operates wind farms in France, 

Germany and Morocco, and also develops wind projects in 

France, Italy, India and Brazil. 

Value/MW 

310.5 2.35 

95.8 0.96 

171.2 2.36 

148.5 4.24 

96.5 1.93 

132.3 0.8 


Between 2007 and 2009, around 40% of the 150 

largest M&A transactions that occurred involved 

acquisitions of pure players by other pure players. 

Over 75% of deal volume in the segment was 

generated by deals valued between $5mn and 

$100mn. 

The transaction value/MW ratio for disclosed 

transactions has varied significantly, with acquired 

companies ranging from start-up businesses to 

mature, asset-heavy companies. For example, the 

value/MW multiple for Novas Energías do Ocidente’s 

acquisition of NEO Galia in 2008 was $4.2mn/MW, 

well above the year average of $2.1mn/MW. The 

corresponding multiple for Theolia’s acquisition of 

165 MW wind farms from GE Energy in 2007 was 

$0.8mn/MW, below the year average of 1.0mn/MW. 

Furthermore, the multiple was higher for transactions 

involving acquisitions by larger pure-play companies 

such as Iberdrola Renovables and Gestamp Eólica, 

willing to offer a slight premium to acquire assets 

with grid access. In addition, the type of target 

company involved in transactions concerning pureplay 

buyers is considerably more diversified 

compared with utilities which tend to prefer wind 

energy providers to solar or biomass companies. 

This implies that pure-play companies are seeking to 

diversify their alternative energy portfolio and are 

willing to pay a premium to acquire target assets. 

June 2010 




Transactions involving acquisitions by utility companies 

Date 

Announced 

30-Sep-09 

21-May-09 

04-Aug-08 

04-Jan-08 

07-Aug-07 

04-Aug-07 


($mn) 

AIM PowerGen 

Corporation 

(Canada) 

North 

Allegheny 

Wind, LLC 

(USA) 

M & A 

Rinnovabili 

s.r.l. (Italy) 

Airtricity 

Holdings 

Limited 

(Ireland) 

ENERGI E2 

Renovables 

Ibéricas S.L. 

(Spain) 

Trinergy Ltd. 

(wind farms in 

Italy and 

Germany) 

International 

Power plc 

(UK) 

Duke Energy 

Corporation 

(USA) 

Alpiq Holding 

AG 

(SWX:ALPH) 

(Switzerland) 

Scottish & 

Southern 

Energy plc 

(UK) 

E.ON AG 

(DB:EOAN) 

(Germany) 

International 

Power plc 

(UK) 

AIM PowerGen Corporation develops, constructs and 

operates wind power generation facilities in Canada. The 

company was founded in 2001 and is headquartered in 

Markham, Canada. It was acquired by UK-based 

International Power plc. 

North Allegheny Wind, LLC owns a wind farm with 35 

Gamesa wind turbines, each capable of producing two 

megawatts (MW) of electricity, i.e. total power production 

capacity around 70 MW. The company was acquired by 

Duke Energy Corporation in order to comply with the RPS. 

M & A Rinnovabili s.r.l. develops, installs and operates onand 

offshore wind farms, solar power and biomass plants. 

The company was founded in 2008 and is based in Italy. M 

& A Rinnovabili s.r.l. operates as a subsidiary of Moncada 

Energy Group s.r.l. 

Airtricity Holdings Limited, a renewable energy company, 

develops, constructs and operates on- and offshore wind 

farms mainly in Europe and Asia. The company was 

founded in 1997 and is headquartered in Dublin. Its wind 

farm sites are located in England, Wales, the Republic of 

Ireland, Scotland, Germany and the Netherlands. Scottish 

and Southern Energy plc acquired Airtricity following the 

adoption by the EU of a legally binding target of 20% for the 

proportion of all energy to be derived from renewable 

sources and a decision by the Scottish government to adopt 

a new target to generate 50% of Scotland’s electricity from 

renewable sources, also by 2020. 

ENERGI E2 Renovables Ibéricas S.L. develops and 

operates renewable projects including wind farms in Spain 

and Portugal. The company is headquartered in Madrid, 

Spain. It was acquired by E.ON to further expand its 

alternative energy operations in Europe. 

On 31 August 2007, key wind farm assets owned by 

Trinergy Ltd were acquired by International Power plc. They 

were located in Italy (495 MW in operation and 67 MW 

under construction) and Germany (86 MW in operation). 

Trinergy is headquartered in Dublin, Ireland. The acquisition 

allowed International Power plc to expand its alternative 

energy assets in Europe. 

Value/MW 

120.9 N/A 

124 1.77 

249.7 N/A 

3,253.1 N/A 

993.6 N/A 

1,196 1.85 


Between 2007 and 2009, approximately 26% of the 

150 largest M&A transactions involved utilities 

acquiring pure-plays. The transaction value for such 

deals varied widely, ranging between $5.5mn and 

$3.6mn. 

The value/MW multiple for such transactions has 

exceeded annual averages for all deal types, e.g. in 

the Duke Energy acquisition of Northern Allegheny in 

2009 the value/MW multiple was $1.77mn/MW, 

above the year average of $1.4mn/MW. In 2007, the 

corresponding ratio for International Power’s 

acquisition of Trinergy was $1.85mn/MW, 

significantly higher than the year average of 

$1.0mn/MW, suggesting that utility companies are 

willing to pay a slight premium, especially for targets 

possessing large-scale operations and enjoying 

adequate grid connectivity. 

June 2010 

Utility companies have been eager to acquire 

alternative energy companies to meet legally binding 

renewable energy targets in their respective 

countries. As a result, we expect them to continue to 

account for a large share of M&A activity in the short 

to medium term. However, several larger utility 

companies, including E.ON and Scottish and 

Southern Energy, have shown a keen interest in 

acquiring companies engaged in the development, 

construction and operation of wind farms. Such 

acquisitions will allow larger utility companies to 

undertake alternative energy projects on a much 

larger scale and to develop and sell operating assets 

to other companies. 




Transactions involving private equity and other financial buyers 

Date 

Announced 

03-Aug-09 

21-Jul-09 

29-Sep-08 

29-Aug-08 

31-Dec-07 

01-Jun-07 


($mn) 

Kallista 

Energies 

Renouvelables 

and Kallista 

(France) 

ENDESA 

INGENIERÍA 

S.L. (10 MW 

PV plant in 

Spain) 

Helium Energy 

S.L.U. (Spain) 

AGL Energy 

Limited (71 

MW Hallett 2 

wind farm) 

(Australia) 

Horizon Wind 

Energy, LLC, 

(four wind 

farms in USA) 

Zephyr 

Investments 

Ltd. (UK) 

AXA Private 

Equity 

(France) 

Macquarie 

Capital Funds 

Ltd. (Europe) 

Hudson Clean 

Energy 

Partners 

(USA) 

ANZ 

Specialist 

Asset 

Management 

Limited (New 

Zealand) 

GE Energy 

Financial 

Services; 

Wachovia 

Investment 

Holdings 

(USA) 

M&G 

Investment 

Management 

Limited; J.P. 

Morgan 

Investment 

Management 

Limited (UK) 

On 3 August 2009, Kallista Energies Renouvelables and 

Kallista France of Babcock & Brown Limited were acquired 

by AXA Private Equity. The companies own and operate 

wind farms and generate wind energy. Kallista Energies 

Renouvelables and Kallista France are headquartered in 

Paris, France. 

On 9 July 2009, a 10 MW photovoltaic plant owned by 

ENDESA INGENIERÍA S.L. was acquired by Macquarie 

Capital Funds (Europe) Ltd. The plant, located in Cadiz, 

Spain, produces electricity using solar energy. 

Helium Energy S.L.U. operates as a renewable energy 

development company. It develops, builds and owns wind 

and solar projects in Spain, Panama, Chile, Europe and 

South America. The company was founded in 2006 and is 

based in Madrid, Spain. The acquisition will enable all 

Hudson Clean Energy Partners to access Spain’s lucrative 

wind power generation market. 

AGL Energy Limited’s Hallett 2 wind farm, based in 

Australia, produces 71 MW of electricity. This wind farm was 

acquired by the New Zealand-based ANZ Specialist Asset 

Management Limited. 

GE Energy and Wachovia Investment Holdings jointly 

acquired four wind farms in the US from Horizon Wind 

Energy, LLC, with a total installed capacity of 600 MW. 

M&G Investment Management Limited (UK) and J.P. 

Morgan Investment Management Limited (UK) jointly 

acquired Zephyr Investments Ltd, a wind farm owner and 

operator. The company was founded in 2003 and is based in 

Swindon in the United Kingdom. 

Value/MW 

317 N/A 

108.8 10.88 

144.1 N/A 

48.1 0.68 

600 1.0 

304.9 N/A 


Between 2007 and 2009, a total of 17% of the 150 

largest M&A transactions involved acquisitions of 

pure-play companies by private equity and 

institutional investors. Over 70% of the segment deal 

volume was generated in the low to medium-sized 

market, i.e. between $30mn and $300mn. 

The transaction value/MW ratio for disclosed 

transactions has varied widely. For example, the 

value/MW multiple for Macquarie Capital Funds’ 

acquisition of a 10 MW PV plant from ENDESA in 

2009 was one of the highest observed at 

$10.88mn/MW, almost twice the year average of 

$5.5mn/MW. The corresponding multiple for ANZ’s 

acquisition of the 71 MW wind farm from AGL 

Energy in 2008 was $0.68mn/MW, well below the 

year average of $2.1mn/MW. 

June 2010 

In common with pure-play companies, targets 

acquired by private equity and institutional investors 

were also generally diversified. The average value 

for this type of transaction was highest in 2007 at 

around $237mn but fell significantly in 2008 to 

$80mn, the lowest of all transaction types. However, 

deal activity by such firms is recovering with 

improving liquidity and attractive valuations resulting 

in an increase in both volumes and transaction 

values in 2009 for acquisitions involving private 

equity and financial buyers. 




Private placements 

Date 

Announced 

24-Dec-09 

24-Feb-09 

24-Apr-08 

22-Jan-08 

02-Oct-07 

12-Jun-07 


($mn) 

Electrawinds 

N.V. / S.A. 

(Belgium) 

Enfinity 

Management 

BVBA 

(Belgium) 

Wind Capital 

Group, LLC. 

(USA) 

Capital 

Energy, S.A. 

(Spain) 

EverPower 

Wind Holdings, 

Inc. (USA) 

Bull Moose 

Energy, LLC. 

GIMV N.V. 

and Inframan 

N.V./S.A. 

(Belgium) 

Waterland 

Private Equity 

Investments 

B.V. 

(Netherlands) 

NTR plc 

(Ireland) 

Iberian 

Renewable 

Energies 

(Luxembourg) 

; Pontegadea 

Participacione 

s, S.C.R., 

S.A. (Spain) 

Good 

Energies Inc. 

(UK) 

Morgan 

Stanley 

Private Equity 

(USA) 

Electrawinds N.V./ S.A. produces, sells and distributes green power. 

It constructs and operates windmill farms, solar farms, bio steam and 

biomass power plants, and also investigates and develops 

renewable energy opportunities and applications. It complements 

GIMV’s strategy of investing in infrastructure and innovative 

companies. The company was founded in 1998 and is based in 

Oostende, Belgium. 

Enfinity Management BVBA develops, finances and executes 

renewable energy projects. It focuses on investments in photovoltaic 

energy and wind energy. The company was founded in 2006 and is 

based in Ghent, Belgium. Waterland Private Equity Investments BV 

is a private equity and venture capital firm specializing in 

investments in medium-sized private companies. It targets 

investments in expansion capital, industry consolidation, 

acquisitions, buyouts, divestitures and add-on acquisitions. 

Wind Capital Group, LLC develops and constructs wind farms, and 

produces wind energy in the central US. The company was founded 

in 2005 and is based in Saint Louis, Missouri with additional offices 

in Madison, Wisconsin; and Chicago, Illinois. As of 24 April 2008, 

Wind Capital Group, LLC operated as a subsidiary of NTR plc. NTR 

plc acts as a developer and operator of renewable energy and 

sustainable waste management in Europe and North America. 

Capital Energy, S.A. is active in offshore wind farms, photovoltaic 

energy, onshore wind farms, self-consumption and distributed wind 

farms, desalination plants and biomass plants. Capital Energy, S.A 

was founded in 2002 and is based in Madrid, Spain. Iberian 

Renewable Energies and Pontegadea Participaciones are both 

principally investment firms. 

EverPower Wind Holdings, Inc. develops wind power projects in the 

Northeastern and Mid-Atlantic regions of the United States. It also 

develops green-field sites and utility-scale wind systems. The 

company was founded in 2002 and is based in New York with an 

additional office in Portland, Oregon. Good Energies Inc. is a venture 

capital arm of Cofra Holding AG, which invests in all types of 

alternative energy companies. 

Bull Moose Energy LLC. was founded in 2005 to create and develop 

new concepts for power production from renewable energy sources. 

The company’s first clean, modular, urban facility for the production 

of biomass energy will be built in San Diego and provide power to 

San Diego Gas & Electric Company. 

57.5 

63.8 

150 

170.3 

55 

60 


Between 2007 and 2009, a total of 171 private 

placements by wind, solar and biomass companies 

occurred with an average value for disclosed deals 

of $33.3mn. 

Most private placement targets involve early 

developers requiring project development capital. 

For example, in 2007 Bull Moose entered into its first 

contract to supply 20 MW of renewable energy to the 

San Diego Gas & Electric Co. from 2008. It therefore 

required capital to construct a biomass plant in San 

Diego. However, smaller companies face 

considerable difficulties in raising capital through 

private placements with the risk appetite of 

traditional buyers now much lower than previously. 

So far, this situation has not yet resulted in a 

significant increase in the number of distress sales 

by smaller alternative energy companies. The key 

question will be whether such developers have 

sufficient resources to continue holding projects until 

additional funding is secured or whether they will be 

compelled to sell. Nevertheless, smaller alternative 

energy companies will continue to seek investments 

by private placement, which could offer significant 

opportunities for companies to acquire exposure to 

commercially attractive start-up or small scale 

alternative energy companies. 

June 2010 



Transaction Case Studies 

Role of M&A International: 

Advisor to 

Sector 

Target 

Our role 

Selling Company/ Location 

Activity 

Acquiror/ Investors/ Location 

Activity 

Description of Transaction 

Alternative Energy 

Biomasse Heizkraftwerk Herbrechtingen GmbH 

Advisor to Seller 

Fortum Power, Ingenieurbüro Oskar von Miller, Sturm Holding, Germany 

Shareholders of the Herbrechtingen BioHKW power plant 

Euro Bioenergie II GmbH, Germany 

Biomass development platform 

Advised the shareholders of Biomasse Heizkraftwerk Herbrechtingen GmbH on the 

disposal of its biomass power plant in Southwest Germany for an undisclosed sum. 

Role of M&A International: 

Advisor to 

Sector 

Target 

Our role 

Selling Company/ Location 

Activity 

Acquiror/ Investors/ Location 

Activity 

Description of Transaction 

Alternative Energy 

SWS Natural Resources Ltd 

Advisor to buyer 

SWS Natural Resources Ltd, Ireland 

Operates wind energy and bioenergy projects, and provides forestry services 

Bord Gais Eireann, Ireland 

Gas utility company involved in the transmission and supply of natural gas 

Advised Bord Gais Eireann on its acquisition of SWS Natural Resources from Ion Equity for 

US$755 million. The acquisition will strengthen the asset base of Bord Gáis and provides 

renewable resources to meet customer demands. 

June 2010 



Conclusions 

The next two to three years will be interesting for the 

alternative energy sector as its growth is so highly 

dependent on regulatory change as well as the 

increasing marginal cost of conventional 

hydrocarbon production. While falling energy and 

carbon prices during 2008–2009 called into question 

the short-term economics of alternative energy, the 

long-term outlook remains positive. The increasing 

marginal cost of hydrocarbon production (driven by 

greater extraction complexity and falling reserves per 

well) together with technological improvements 

within the sector will significantly improve the 

economic case for alternative energy. This, 

combined with increased regulatory support and 

governmental incentives will bolster the case for 

alternative energy investment. 

Encouraging alternative energy through the use of 

incentive mechanisms by governments worldwide 

will stimulate an increase in M&A activity. We expect 

the following near-term catalysts: 

• Regulatory targets: Utility companies moving 

to increase the volume of renewable energy 

generation in their portfolios in response to 

changing climate legislation. 

• Constrained supply chains: In many parts of 

the world, the increased number of new projects 

are exerting pressure on supply chains which, in 

turn, is promoting interest in M&A activity and 

the development of joint ventures and strategic 

alliances. 

• International expansion: Underdeveloped 

alternative energy capacity in several countries 

offers significant potential for growth for 

international buyers and domestic players. 

• Buyers from outside the sector: Buyers such 

as infrastructure, real estate and manufacturing 

companies are increasingly pursuing M&A 

activities across the alternative energy sector 

value chain to ensure a sustainable business 

model. 

About M&A International Inc. 

M&A International Inc.’s members actively represent 

buyers and sellers in the energy M&A market as well 

as those seeking to raise private equity and debt 

capital. They possess significant energy domain 

expertise, industry relationships and experience in 

successfully executing complex transactions on 

behalf of our clients. Our members have closed over 

100 energy-related deals in the past three years. 

Paul Puri 

Head of M&A International Inc.'s 

Energy Group 

Email: paul.puri@cadallas.com 

June 2010 



M&A International Inc. Energy Specialists 

Country Contact Email 

Americas 

Argentina Esteban Gutierrez gutierrez@ibpartners.com 

Brazil Aleixo Vaquero avaquero@stratusbr.com 

Brazil Gianni Casanova casanova@ibpartners.com 

Canada Jack Woodcock jwoodcock@cvpl-veracap.com 

Chile Guillermo Arnaiz arnaiz@ibpartners.com 

Colombia Hernan Sambucetti sambucetti@ibpartners.com 

United States (Atlanta, Boston and W. Gregory Robertson grobertson@tmcapital.com 

New York) 

United States (Chicago) S. Jack Campbell jackc@masiltd.com 

United States (Dallas) Paul Puri paul.puri@cadallas.com 

United States (Philadelphia) Francis E. Baird fbaird@mmadvisors.com 

United States (Richmond) Tom Kelso tkelso@matrixcmg.com 

Europe 

Bulgaria Dimitar Kostadinov DKostadinov@Entrea-Capital.com 

Czech Republic Milos Cebik milos.cebik@wood.cz 

Denmark Lars Gottlieb lars.gottlieb@audonpartners.dk 

Estonia Matiss Paegle matiss.paegle@gildbankers.com 

Finland Janne Simelius janne.simelius@merasco.com 

France Patrick Vignaud pv@aeliosfinance.com 

Germany Stefan Benzing stefan.benzing@angermann.de 

Hungary Attila Gajdics a.gajdics@con.hu 

Ireland Raymond Donegan raymond.donegan@ibicorporatefinance.ie 

Italy Davide Eugenio Milano milano@mergers.it 

Latvia Matiss Paegle matiss.paegle@gildbankers.com 

Lithuania Matiss Paegle matiss.paegle@gildbankers.com 

Netherlands Maarten Wolleswinkel mwolleswinkel@hcfinance.nl 

Norway Nikolai Lunde nl@bridgehead.no 

Poland Bill Fawkner-Corbett w.corbett@mergers.pl 

Slovakia Martin Smigura martin.smigura@wood.com 

Slovenia Jure Jelerčič jure.jelercic@publikum.si 

Spain José F. Alvarez jar@closa.com 

Switzerland Roberto Tracia roberto.tracia@binder.ch 

Turkey Ali Yazgan aliyazgan@pdf.com.tr 

United Kingdom Azhic Basirov azhic.basirov@smith.williamson.co.uk 

United Kingdom Michael Jewell mjewell@cavendish.com 

Asia-Pacific 

China (Beijing) James Chen james.chen@seimchina.com 

China (Hong Kong) Adrian Bradbury adrian.bradbury@quamgroup.com 

Thailand (Bangkok) Robert Fernstrom robertf@ktzmico.com 

Australia (Sydney) Paul Young pyoung@baronpartners.com.au 

Israel (Tel Aviv) Tomer Eblagon tomer@rosario-capital.co.il 

Africa 

South Africa David Shimkins davids@grindrodbank.co.za 

June 2010 



M&A International Inc. Representative Transactions 

June 2010 



M&A International Inc. offers the unparalleled resources of over 500 

professionals in M&A advisory and investment banking firms operating 

around the globe. 

M&A International 

www.mergers.net 

Founders of: 

the M&A Mid-Market Forum 

the Strategic Acquirors Forum 

www.midmarketforum.com 

www.mergers.net/saf 

© 2010 M&A International Inc. All rights reserved. M&A International 

Inc. refers to the alliance of member firms of M&A International Inc., 

each of which is a separate and independent legal entity. 

June 2010

M&A International Inc. Alternative Energy M&A - Western Reserve ...

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