Mercom Capital Group Reports First Quarter 2012
Funding and M&A Activity for Solar Sector
Solar VC Funding Drops with $329 Million; Highest Number of Deals Recorded with 34
New Delhi – April 10, 2012 – Mercom Capital Group, llc, a global clean energy communications and consulting firm, today released its report on funding and mergers and acquisition (M&A) activity for the solar sector during the first quarter of 2012.
Venture Capital (VC) funding in the solar sector was off to a slow start in Q1 2012. VC funding for the quarter came to $329 million in 34 deals, the lowest dollar amount recorded since Q4 2010; however, VC investors were still very active in the sector with a record 34 deals funded, the highest ever recorded in the solar industry.
“While VC’s interest in the solar sector remains strong, their appetite for risk appears to be lower as the average VC funding round amount in Q1 was $10 million, compared to $18 million in 2011,” said Raj Prabhu, Managing Partner at Mercom Capital Group.
“To add to the current over capacity problems, policy changes and lower tariff announcements in some of the largest solar markets, such as Germany and Italy, will all contribute to an uncertain 2012,” Prabhu continued. “We can expect a more cautious approach to investing in the solar sector this year.”
There was strong M&A activity in the solar sector totaling $5 billion in 15 transactions, however only four of these transactions disclosed details. The spike in M&A amounts was mainly due to the $4.7 billion acquisition of Solutia, a performance and specialty chemicals company with products in PV encapsulants, performance films for PV and CSP products and heat transfer fluids for CSP plants, by Eastman Chemicals Company. Other significant M&A transactions included the $275 million acquisition of Oerlikon Solar, a producer of equipment and turnkey manufacturing lines for thin film amorphous silicon and tandem junction technology, by Tokyo Electron, and Andrem Power’s $274 million acquisition of 3W Power (a holding company of AEG Power Solutions), a provider of power controller for polysilicon production, solar inverters and monitoring and control systems for photovoltaic power plants.
The first quarter of 2012 also saw 11 new cleantech and solar-focused investment funds announced committing $5.7 billion. A significant positive event for the solar sector in Q1 was the Initial Public Offering (IPO) of the microinverter company Enphase Energy, which raised $62 million as part of its offering.
The top five funding deals made up about 60 percent of the total funding in this quarter, led by $81 million by SolarCity, a pioneer in the solar lease model. Three of the five top companies to receive funding also included MiaSolé, Nanosolar and AQT Solar, all CIGS companies, raising $94 million in total. Maintaining last year’s trend, with half a billion dollars raised in 2011, CIGS companies continued to receive the most amount of VC funding as a technology group.
There were 56 different VC investors that participated in the 34 deals. Venture capital firms that recorded multiple rounds included Black Coral Capital and Firelake Capital Management. The United States continued to be the dominant country for VC investments, accounting for about 80 percent of all VC funding in the first quarter.
For a complete list of Q1 2012 transactions in the solar sector, visit: http://mercomcapital.com/cleanenergyreports.php
About Mercom Capital Group
Mercom Capital Group, llc, is a global communications and consulting firm focused exclusively on clean energy and financial communications. Mercom’s consulting division advises cleantech companies on new market entry, custom market intelligence and overall strategic decision-making. Mercom’s consulting division also delivers highly respected industry market intelligence reports covering Solar Energy, Wind Energy and Smart Grid. Our reports provide timely industry happenings and ahead-of-the-curve analysis specifically for C-level decision making. Mercom’s communications division helps clean energy companies and financial institutions build powerful relationships with media, analysts, government decision-makers, local communities and strategic partners. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com. To get a copy of Mercom’s popular market intelligence reports, visit: http://mercomcapital.com/market_intelligence.php