TODAY’S STUDY: THE SMART GRID BUSINESS THIS YEAR
Smart Grid Funding and M&A, Q2 2012 Report; Funding and merger & acquisition activity for the smart grid sector
July 2012 (Mercom Capital Group LLC)
Introduction
Smart grid venture capital (VC) funding remained weak in Q2 2012 totaled $66 million in nine deals. VC funding levels have stayed very flat in the last three quarters (Q4 2011: 10 deals, $66 million; Q1 2012: 10 deals, $62 million). Funding levels continue to be extremely weak in the smart grid sector, a reflection of shifting business models as the industry continues to struggle to understand customers needs and address customer misconceptions along with security concerns among other issues.
Top 5 deals this quarter included $15 million raised by Power Plus Communications from Siemens, Climate Change Capital Private Equity and British Gas, Tendril’s $11 million from Vantage Point Ventures, Good Energies, RRE Ventures, GE and Siemens, $10 million raised by On-Ramp Wireless (investors undisclosed), $8 million raised by Gridco from North Bridge and General Catalyst Partners, $8 million raised by Navetas from Sensus and $6 million raised by TaKaDu from ABB, Emerald Technology Ventures, Gemini Israel Funds and Giza Venture Capital.
Twenty-two different investors participated in nine VC deals in Q2 2012, but only Siemens was involved in multiple deals (two). There were only eight investors in Q1 2012. Merger & Acquisition (M&A) activity in Q2 2012 totaled $14 billion in seven transactions. Top M&A transactions were the $11.8 billion acquisition of Cooper Industries, a grid and equipment company by Eaton, the $2.3 billion acquisition of smart meter company Elster by UK investment company Melrose and the $72 million acquisition of ZigBee systems developer Ember by Silicon Labs.
Top acquirers with multiple deals year to date: Eaton (Cooper Industries and Gycom (Business Units in Sweden, Denmark and Finland), Siemens (Senergy Sistemas de Medicao and RuggedCom), Itron (SmartSynch and C&N Engineering (GasGate Technology).
Top acquirers with multiple deals in 2011: Schneider Electric (Telvent, Summit Energy, Viridity (DCIM technology), ABB (Power Corp, Epyon, Obvient Strategies), GE (FMC-Tech, Remote Energy Monitoring, SmartSignal Corporation), Alstom (Utility Integration Solutions, Psymetrix), Ameresco (Energy & Power solutions, Applied Energy Group) and EnerNOC (Energy Response, M2M Communications).
Top acquires with multiple deals in 2010: ABB (Insert Key Solutions, Ventyx), EnerNOC (Global Energy Partners, SmallFoot), GE (Opal Software, SNC-Lavalin (ECS Business, Network Management, Control Software), Honeywell (E-mon, Akuacom), Navigation Capital Partners (LEPService, Specialized Technical Services), Siemens (Site Controls, QuickStab (Software Package) - (SCS Info Tech).
VC Funding
VC funding in Q2 2012 amounted to $66 million in nine deals. By comparison, funding in Q2 2011 was $112 million in 16 deals and Q1 2012 was $62 million in 10 deals.
Looking at 2011 to 2012 year-to-date, Smart Grid Communication Technology companies have received the most funding as a technology group followed by Grid Optimization, Advance Meter Infrastructure (AMI) companies and Demand Response companies.
The average deal size in Q2 2012 was $7.3 million compared to $6.2 million in Q1 2012. The spikes in the chart below for average VC deal size was due to some larger deals:
Q2 2010 - (Landis+Gyr $165M; OpenPeak $52M)
Q3 2010 - (Trilliant $106M; Nexant $43M)
Q4 2010 - (OPower - $50M; AlertMe $24M; Ice Energy $24M; Tendril $23M)
Q3 2011 - (Six deals out of 10 in Q3 were for $10 million or more)
The average deal size has gradually trended downward from $25.4 million in Q2 2010 to $7.3 million in Q2 2012.
The top VC deal in Q2 2012 was the $15 million raised by Power Plus Communications, a broadband powerline communication systems company, followed by $11.3 million raised by Tendril, an energy management company. Other top deals included $10.1 million raised by On-Ramp Wireless, a low-power monitoring and control applications provider, $8 million each raised by Gridco, a developer of utility-scale power management systems, and Navetas, an energy measurement, management and conservation company, and $6 million raised by TaKaDu, a provider of advanced monitoring solutions for water distribution networks.
The United States accounted for half of the total VC funding raised: $32.4 million in five deals.
Mergers and Acquisitions
Top M&A transactions in Q2 2012 included the $11.8 billion acquisition of grid and equipment company Cooper Industries by Eaton, the $2.3 billion acquisition of smart meter company Elster by UK investment company Melrose, and the $72 million acquisition of ZigBee systems developer Ember by Silicon Labs.
1 Comments:
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