Mercom Capital Group’s CEO Raj Prabhu attributed the slowdown in corporate financing activity in 2018 to the decline in solar demand across the globe, ‘with most company stocks in the negative territory at the end of third quarter’. (Source: Mercom Capital Group)
- Total corporate funding in 9M/2018 came down to $6.7 billion secured in 103 deals, compared to $7.1 billion raised in 9M/2017, according to Mercom Capital Group’s ‘Q3 2018 Solar Funding and M&A Report’
- Investors were happy investing and acquiring projects as large-scale project acquisitions represented a total of 23.6 GW capacity in the first nine months of 2018
- VC funding was a total of $889 million reflecting a decrease of 10% over $985 million registered during 9M/2017. In the third quarter of 2018, VC funding was $359 million in 12 deals, compared to $370 million in 15 deals in the previous quarter
- In public market financing, a total of 14 deals brought in $1.8 billion in the first nine months of 2018
- Debt financing dropped by close to 21% to $4 billion in 40 deals in the first nine months of 2018, compared to same time last year
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Global solar industry has been experiencing strong merger and acquisition (M&A) activity of late, with Mercom Capital Group’s ‘Q3 2018 Solar Funding and M&A Report’ showing robust activity in project acquisitions, rather than investments in companies. There were a total of 64 solar M&A transactions in 9M/2018, up from 59 transactions during the same period last year.
In the third quarter, 18 such transactions were reported out of which 9 involved solar downstream companies, 6 BOS companies, 2 service providers and 1 with a module manufacturer.
Large scale project acquisitions added up to a total of 166 in 9M/2018, representing more than 23.6 GW capacity. In the previous year, 14.6 GW was acquired in 161 project acquisitions. Most of the capacity was acquired by project developers in Q3/2018 that took hold of 8.5 GW in 22 projects, followed by investment firms grabbing 2.86 GW through 21 projects.
Total corporate funding, where Mercom includes venture capital (VC) funding, public market and debt financing, during the first nine months of 2018 reduced to $6.7 billion in 103 deals compared to $7.1 billion in 143 deals a year back in 2017 (see Solar Attracts $2.4Bn Corporate Funding In Q3/2017).
Mercom’s CEO Raj Prabhu blamed it on lower demand for solar. “Decline in solar demand around the globe has had a strong effect on corporate financing activity in solar especially with most solar company stocks in the negative territory at the end of the third quarter,” said Prabhu.
During the first nine months of 2018, VC funding comprising venture capital, private equity and corporate venture capital, added up to $889 million, reflecting a decrease of 10% over $985 million registered during 9M/2017. In the third quarter of 2018, VC funding was $359 million in 12 deals, compared to $370 million in 15 deals in the previous quarter. Top VC deal in Q3/2018 was $200 million raised by Cypress Creek Renewables.
A total of 14 deals brought in $1.8 billion through solar public market funding in first nine months of 2018. In 9M/2017, this number was $1 billion coming in from 23 deals. During the first three quarters of 2018, debt financing declined by close to 21% to $4 billion in 40 deals. Last year during the same time, it was reported as $5.1 billion in 51 deals.
Announced large-scale project funding in 9M/2018 exceeded $11 billion for 137 projects, of which Mercom says more than $3 billion in 39 deals was announced during third quarter alone.
The report is available for purchase on the website of Mercom Capital Group starting from $299.