The renewable energy sector is set to undergo a major consolidation in 2007 as mainstream utility companies snap up smaller, privately owned businesses, according to Clearwater Corporate Finance.
Clearwater’s head of research, Constantine Biller predicts the renewables sector will become a hotspot for mergers, acquisitions and investment. “Groups such as Acciona, AES, EDF, Endesa, Enel, Iberdrola and RWE are all looking to expand their renewable generation capacity and establish a firm foothold in the market,” he explains.
“At the same time specialist renewable energy providers such as Renewable Energy Corp and NTR’s Bioverda subsidiary are keen to extend their geographic coverage by acquiring companies in different locations.”
In February this year Bioverda announced a joint venture with Virgin to exploit bio-fuel opportunities with a particular focus on the US ethanol sector. At the same time they announced an investment in two 100-million-gallon corn-to-ethanol plants in Indiana and Tennessee and are actively looking for additional bio-fuel opportunities in North America and Europe.
Take-overs of renewable energy specialists during 2006 included the acquisition by Canada’s Nova Gold Mining Corporation of hydro-electric power specialist the Coast Mountain Power Corporation. Meanwhile the French company Theolia took over the German wind park developer Natenco and the Spanish building contractor Acciona acquired the Spanish wind farm developer Corporación Eólica CESA.
Biller adds: “Numerous mid-sized businesses are looking to float on the stock markets to raise funds for future acquisitions. Earlier this month Finavera Renewable floated on the Toronto Stock Exhange and in the process raised funds for small and mid-sized acquisitions in the wind and wave energy sectors.
“Meanwhile existing investors in the sector are taking advantage of the growing interest to place their assets up for sale. With the renewable energy market like to reach a peak in 2007, many are using the opportunity to sell their investments at high valuations and put their money into other next-generation technologies.”