Greentech M&A in the U.S. Rises 55% in 2010

Jan. 13, 2011 - PRLog -- In an up-and-down year for U.S. greentech M&A, a record 371 mergers, acquisitions, and capital raises were posted in 2010 for a reported total of $14.7 billion – 55% higher than the $9.5 billion recorded in 2009. Cleantech funding rose 65% to $10.1 billion, up from $6.1 billion in 2009, while aggregate M&A deal value also grew 37% to $4.6 billion. Headlined by IPOs for Tesla Motors, Sensata Technologies, and Ameresco and a $350 million raise for Better Place, energy efficiency continued to trend upwards and emerged as the leading investment theme in 2010. The strong performance by energy efficiency, coupled with increased activity in solar, smart distribution, and wind, helped offset a down year for bioenergy.

Despite establishing new records for deal volume and deal value, the greentech M&A landscape in 2010 revealed both reasons for optimism and causes for concern.

A stream of large corporate buyers jockeying for cleantech leadership rushed into the M&A scene this year – a welcome development for a nascent greentech market that has been big on making promises but small on delivering exits. ABB, Cisco, and Honeywell each made significant smart grid acquisitions to bolster their positions in the growing market. Meanwhile, even amidst a still-fragile economy, numerous energy-saving technologies garnered sources of funding and pushed the energy efficiency and energy storage sectors accelerating forward into 2011.

Economic woes, among other factors, proved severely more difficult for the renewable sector to overcome.  Now three or four years into many of the big bets made on solar and biofuel – with little to show results-wise – greentech investors are wearing thin on patience for renewable energy. Many of these investors trace their roots back to IT, and have learned the hard way that renewable investments require substantially more capital and time than their traditional IT counterparts. Not only that, but renewable energy remains highly dependent on government support and this year inherited a new rival in natural gas, whose low prices have made it an attractive alternative to coal. These factors explained the shift in investor focus this year from megawatts (renewables) to negawatts (energy efficiency), where much of the technology is IT-based. Energy efficiency investments offered the draw of lower capital intensity, quicker returns on investment, and equally important, a comforting blanket of familiarity.

For a comprehensive analysis of the greentech M&A environment in 2010, download the complete report from Peachtree Capital Advisors at http://peachtreecapitaladvisors.com.

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Peachtree Capital Advisors, Inc. is a New York-based investment bank providing M&A advisory services to growth and middle market companies in the technology, digital media, and cleantech sectors.