Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its annual and fourth quarter funding and Merger and Acquisition (M&A) activity report for the solar sector in 2011.
¡°Investment activity in 2011 was robust,¡± said Raj Prabhu, Managing Partner of Mercom. ¡°Whether you point to the dramatic module price declines, Europe¡¯s diminishing incentives, or the so-called ¡®Solyndra effect¡¯, solar continued to gain attention and dollars for technology and innovation through venture capital funding.¡±
Venture Capital (VC) funding and M&A activity were strong in 2011, setting records for number of deals and M&A activity. Notable findings include:
-VC investment in solar totaled US$1.9 billion in 111 deals in 2011¦¡the highest number of deals ever in a single year. By comparison, there were 65 VC deals in 2010, 84 in 2009, 93 in 2008, and 71 in 2007.
-Thin-film technology raised the most VC funding (US$595.5 million in 17 deals), beating downstream companies (US$339 million in 26 deals), crystalline-silicon PV (US$338 million in 20 deals), concentrated solar power (US$308 million in 13 deals), and concentrated PV (US$129 million in 10 deals).
-The solar thermal power company BrightSource Energy raised US$201 million in Series E funding, making it the largest single VC investment of 2011. Stion, a manufacturer of high-efficiency thin-film solar modules, came in second when it announced a US$130 million. The third and fourth highest VC fundraising rounds were by thin-film solar panel maker MiaSol (US$106 million, Series F), and solar cell developer Suniva (US$94.4 million, Series D) respectively.
-The top VC investor of 2011 was Kleiner Perkins Caufield & Byers, which completed eight transactions, followed by GE and Good Energies, with six transactions each. There were 182 VC investors in solar in 2011.
-M&A activity in 2011 was more than double that of 2010 in terms of dollars, and approximately 33% more in deals. There were US$4 billion in M&A activity in 65 deals of which only 26 were disclosed, compared to just over US$2 billion in 44 deals in 2010. The largest single M&A transaction was Total¡¯s (the French oil & gas company ) 60% stake in the solar manufacturer SunPower, accounting for US$1.4 billion of the US$4 billion.
-While Solyndra dominated headlines in the United States and globally, over US$700 million worth of VC investment came after the solar manufacturer¡¯s bankruptcy announcement on August 31, 2011.
-Fourth quarter VC funding totaled US$511 million, compared to US$372 million in Q3, US$354 million in Q2, and US$658 million in Q1.
¡°Falling panel prices and oversupply brought about a lot of consolidation activity,¡± added Prabhu. ¡°With valuations of publicly-traded solar companies at record lows, M&A was the go-to exit strategy.¡±
The United States led all other countries in number of deals and VC funding, with 84 deals and over US$1.5 billion of investments. The United Kingdom completed the second highest number of deals with five, and India garnered the second highest amount of VC funding with US$95 million.
Globally, debt financing totaled US$20 billion. The top debt investor was the China Development Bank. Chinese loans, credit facilities and framework agreements came to US$15.7 billion in ten transactions.
Further Information: Mercom Capital Group, llc (www.mercomcapital.com)
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