$17 billion in M&A transactions recorded
Mercom Capital Group, llc, a global clean energy
communications and consulting firm, released its report on funding and
mergers and acquisition (M&A) activity for the smart grid sector during
a slow start, venture capital (VC) funding in the smart grid sector came in at
$434 million in 40 deals, compared to $377 million in 50 deals in 2011.
There were a total of
66 investors that invested in 2012 compared to 92 investors in 2011. Only
six of the 40 deals were early stage transactions compared to 16 in 2011. The
average VC funding round in 2012 was $10.9 million compared to $7.5 million in
2011. The $136 million raise by Alarm.com skewed the average deal size upward
struggles, Home and Building Automation companies continued to raise majority
of the funding ($198 million in nine deals); followed by Demand Response ($82
million in 10 deals), Grid Optimization ($76 million in nine deals) and Advanced
Metering Infrastructure (AMI) companies ($63 million in eight deals).
is fascinating to see these three distinct sectors, solar, smart grid and
healthcare IT, converge into a single offering - the ’Connected Home’,” said
Raj Prabhu, managing partner of Mercom
Capital Group. “Home automation companies have struggled mightily over the
years to entice consumers, but the convenience and savings created by the
convergence of these technologies into one offering or platform might make it
top VC deal in 2012 was the $136 million raised by Alarm.com from ABS Capital
Partners, Equis Capital Partners, NJTC Venture Fund, and Technology Crossover
Ventures; followed by $30 million raised by Silver Spring Networks, a smart
meter networking company, from Hitachi; $25 million raised by Tendril, an
energy management company, from VantagePoint, Good Energies, RRE Ventures,
General Electric and Siemens; $23.3 million raised by GridPoint, an energy
management company; and $16 million raised by demand response company Comverge
from Triangle Capital Corporation.
There were some huge
M&A transactions in smart grid in 2012. Though none of them were pure
play smart grid companies, they all have smart grid product and service lines.
A total of 23 M&A transactions were executed in 2012, amounting to almost
$17 billion; compared to 30 transactions for almost $5 billion in 2011 and 40
transactions for $1.3 billion in 2010. M&A activity has been slowing down
over the last few years as exits have been sparse.
M&A transactions in 2012 were the $11.8 billion acquisition of Cooper
Industries, a grid and equipment company, picked up by Eaton; followed by the
$2.3 billion acquisition of Elster, a smart meter company, acquired by UK
investment company Melrose; and the $2 billion acquisition of Vivint, a
security and home automation services company (similar to Alarm.com) by
Blackstone. Other top M&A transactions were the $382 million acquisition of
RuggedCom, a provider of rugged communications equipment like routers and ethernet
switches for substations, which got snatched up by Siemens, and the $183
million acquisition of ZIV Group, a smart grid and automation solutions
provider, acquired by Crompton Greaves.
learn more about the report, visit: http://store.mercom.mercomcapital.com/smart-grid/
# # #