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3.75 million more reasons why Toshiba paid up for Landis+Gyr

Greg Neichin

The ongoing auction to acquire Landis+Gyr may have been the worst kept secret of 2011 in the smart grid industry.  Various players – from major equipment vendors such as General Electric to large private equity firms – were rumored to be in the running to purchase the company.  The big reveal came last week when Japanese conglomerate Toshiba showed up to meet L+G at the altar.

While smart metering carries significant buzz in the utility industry, it has not electrified Wall Street (pun intended).  Itron, the best example of a pure-play publicly traded metering company, trades at an enterprise value multiple of  ~1.1x estimated 2011 revenues and ~7.7x 2011 estimated EBITDA.  Certainly not a frothy valuation.  For purposes of comparison, LinkedIn currently trades at an enterprise value to revenue multiple of 30x and an EBITDA multiple of 235x!

For all the quiet chatter of the L+G deal being bid up significantly, Toshiba ended up paying an enterprise value multiple of between 1.4-1.7x 2011 revenues and a 10x-12x multiple on 2011 EBITDA estimates.  Note, these are ballpark estimates – there are plenty of Wall St. equity analysts who can add an extra decimal to these figures if you need them.  …

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Weekly Investment Highlights

Hans Chen

Each week our research team tracks cleantech transactions across the globe. This week we recorded 18 VC/PE deals, eight fund announcements, six M&As and two IPO-related stories. Below are some of the highlights. Cleantech Group subscribers can see the full roundup of all the deals here.

VC, private company and corporate investments

Over $ 1.1 billion of venture/private equity fund was raised by 18 cleantech companies, the two largest deals were:

  • UK private equity firm Bridgepoint sold its majority stake in Environmental Resources Management (ERM), the world’s largest environmental consultancy firm, to Charterhouse Capital Partners for $950 million. Charterhouse is to acquire 65% in the company, with the remainder held by ERM’s 440 partners, whose approval is required for the transaction to close.
  • California-based Fisker Automotive, which manufactures luxury plug-in electric hybrid cars, has raised an extra $100 million in a round of funding to help fund production of its luxury sedan and a second, cheaper electric car that is geared toward more mainstream hybrid electric car buyers. Fisker had just raised a total of $190 million in its last round of funding two months ago.

Mergers and acquisitions

Six cleantech M&A transactions were tracked this week. Highlights included:…

Water: Week in Review

artipatel

M&A/ Partnerships

Projects

Corporates and Cleantech: Innovative Solutions for a Changing Business Climate

VinceKnowles

The natural world is changing. 90 years ago cheap energy, plentiful water and a stable climate were beyond question; today none of these have certain futures.

The business world is changing. 90 years ago the average duration of a company in the S&P 500 was over 60 years; today it is only 10 years.

In this volatile environment the corporate is in a challenging situation, with the weight of regulatory pressure coming down from governments and eruptions of creative destruction bursting up from smaller companies. Only this month the UK Government announced legally binding carbon reduction targets that will keep the country on track for 60% reductions on 1990 levels by 2030, a measure that will drastically affect business over the coming decades.

However, as in all times of disruption and change, there will be both winners and losers. While there is much to lose for established corporates, there is also plenty to gain if the threat of disruptive technology can be harnessed into opportunity, through proactive innovation strategies. The global market for cleantech products is projected to double to $3.5 trillion by 2020, showing there is plenty of money to be made in the right areas. Research undertaken by

G-volution: Overhauling the Haulage Industry

Stephen Marcus

Amidst the EV hype, there is a prominent cohort of venture investors (including Vinod Khosla), who say that EVs do not make economic sense. For these investors, the idea of electrifying fleets of Heavy Goods Vehicles (HGVs) is further constrained to the realms of our most imaginative dreams. With the haulage industry particularly sensitive to fuel price increases (it is estimated that fuel bills in the Road Haulage industry account for 35% to 40% of total costs), there is a strong case for “fuel efficiency” technologies in HGVs.

This is where UK-based G-volution steps in. “G-volution has developed a multi-fuelling system that reduces costs and carbon emissions in HGVs”, said Chris Smith, the company’s Managing Director. The patented solution allows vehicles to use two (or more) fuel sources at the same time – a primary fuel, currently diesel, and one or more alternative fuels, currently LPG – without loss of power. Its product, the “Optimiser”, works alongside existing engine management Electronic Control Units (ECUs) and actively monitors in real time how much power is being demanded by the driver. The technology then intercepts the diesel injector signal and trims it accordingly.

G-volution says that a precise mix of alternative …

Are we nearing a smart water inflection point?

Greg Neichin

I spent the past two days in Paris presenting and participating at the SWAN Water Forum, a conference specifically built around smart water innovation.  The team from SWAN, led by TaKaDu’s Guy Horowitz, managed to bring together a critical mass of some of the most important investors, corporations, utilities, and venture-backed startups in the space.  While the topic of smart water is beginning to get lip service at more general cleantech industry events, this was a great chance to trade thoughts with a group that is actively working to catalyze adoption.

I began my Tuesday talk by laying out what is becoming a familiar story for those in the water innovation sector.  Water production and management is fast becoming a mission critical issue due to real shortages brought on by rising populations, the deterioration of aging water infrastructure and assets, the emergence of new contaminants into water supplies, and the increasingly important intersection of water and energy issues (nearly 5% of U.S. energy use can be attributed to moving water around).  At the same time, tens of billions of dollars are spent on water equipment each and every year.  It should be a simple equation

Big problem +

My feeling that multinational corporations “get” cleantech innovation

Stephen Marcus

For several years now, Cleantech Group has been beating the drum on the importance of corporations in cleantech innovation. And having just returned from our Cleantech Forum in Amsterdam which was themed “Cleantech Goes Corporate”, one could not help but feel that the drum beat is not only loud, but getting louder!

To echo (and horribly paraphrase – sorry) the words of Nancy Floyd, the Founder and Managing Director of Nth Power from the event: 15 years ago a few corporations were looking to invest in new energy funds just out of curiosity about the dealflow; now they see these technologies as crucial elements of their future growth strategies.

One only needs to look at a graphical sample of active corporations in cleantech to see how true Nancy’s words are:

Sample of corporate active in cleantech

The importance of cleantech innovation to multinationals could really be felt throughout our Amsterdam conference rooms. Delegates from over 30 multinational corporations including GM, Philips, Unilever, Total, Siemens, British Gas, EDF, Cisco, Bosch, BASF, Rhodia, Autodesk and Veolia (to name but a few) all came to network, brainstorm, understand, speak and exhibit. Corporate delegates with titles such as “Head of Emerging Technologies”, “Head …

If Energy Were Free and Unlimited…

Guest Analyst: David Gold

As soon as gas prices rise, our nation becomes focused on energy.  When they drop again, it falls off most consumers’ radar.  Yet the importance of energy goes way beyond the cost of filling up your gas tank or paying your electric bill.  In often-extraordinary ways, energy is interwoven into absolutely everything that we need to live or that we love to do.  One of the most useful tricks I learned in engineering school is that to put any problem in perspective, it helps to ask what if things were at zero or infinity.  So, to put things in perspective, let’s ask the question…

“What if energy were free and unlimited?”
  • People would be able to travel at bargain-basement rates.
    Yes, the cost of land vehicle transportation, which is so much of the focus in the press, would drop by 25%-35%[i].  But, in addition, airline costs would plummet as much as 50%.  With this would come increased commerce and maybe even greater worldly understanding, as more people are able to travel.
  • The world’s growing shortage of fresh water would largely disappear.
    A huge amount of energy is expended on the conveyance, pre-treatment, distribution and wastewater treatment.   Energy represents 30% or

The Promise of Water Innovation

Mia Javier

A dialogue has emerged among industry groups, regulatory agencies, investors and R&D communities about the importance of water innovation and innovative water resource management approaches. The tradeoff debates are becoming especially acute, particularly as they relate to energy, food and common goods.

As a result, environmental, economic and social demands for water continue to be in fierce competition, resulting in some sobering statistics. One study has projected that, based on current water use practices, by 2030 3.9 billion individuals will be living under severe water stress. Not a good outlook for communities and certainly not a good outlook for business.

In some cases, adapting to water stress has produced regional leaders in both water technology development and integrated water resource management. While the particular circumstance of water stress can be a key driver, many also recognize that the value of ensuring water security is part and parcel with supporting economic development.

Still, water technology development is a fairly new phenomenon and venture capital (VC) or ‘innovation financing’ has not yet organized itself around this particular sector. Indeed, financing for water technology innovation accounts for a paltry 2% to 3% of total cleantech VC. With the exception of those in the …

SenseLogix: Plugging the Energy Management Gap

VinceKnowles

While the fully automated house remains a pipe dream of home energy management, energy efficiency in office buildings has progressed to the development of building management systems (BMS). Building Management Systems are centralised, programmed specifically for the needs of their building and have traditionally managed HVAC, along with lighting and access control more recently.  While these systems allow much of a buildings energy use to be centrally controlled, they cannot control plug-in devices. They are also inflexible, as adapting to changes in a building’s use after BMS installation requires expensive servicing from a programmer and so are not frequently updated.

Currently the most common answer to the challenge of saving energy in plug-in appliances is discrete plug-in control devices, for example timers. These share none of the drawbacks of BMS as they are easily to implement and adapt and are not limited to HVAC and lighting energy savings. However these plug-in devices also share none of BMS’s advantages, as they cannot be coordinated across a building and are easily stolen, making them inappropriate for education and public access settings.

In May 2009 SenseLogix was founded with the aim of filling this gap between BMS and discrete plug-in controls and providing …