Earlier this month, Solar panel maker Solyndra cancelled its IPO citing current market uncertainties.
It was not alone. Six other companies cancelled theirs the same month, though they were not in the clean-tech business.
Tesla Motors will soldier on and sell stock to the public on thsi week. The shares may even get a warm reception, despite that the company’s $290 million of losses since its founding seven years ago.
Venture capitalists predict a wave of mergers and aquisitions in clean tech.
These days Tesla is looking more like the exception rather than the rule. Other clean-tech companies have IPOs in the pipeline, Amyris and Zipcar, for example. Still others, such as Silver Spring Networks, will likely get favorable receptions if they decide to launch their own deals. (Speculation is Silver Spring could announce in July.)
But it appears more likely clean-tech start-ups and venture capitalists will make money and fund company expansion with mergers and acquisitions rather than new stock offerings. With the window for IPOs once again shutting, M&As could find themselves on the rise.
“I think we are likely to see a huge wave of M&A kicking in for clean tech,” says Alan Salzman, CEO of Vantage Point Venture Partners. The growing maturity of young companies will fuel it.
There are signs of a building wave already. In the first quarter, clean-tech companies logged 197 M&A transactions compared with just 13 IPOs, according to Cleantech Group. Despite a long list of companies registering for stock sales in the U.S., most of the IPOs – eight – took place in China.
And while the IPOs were off 28 percent from the fourth quarter, mergers and acquisitions seem on the rise. In 2009, 505 deals took place globally, or an average of 126 a quarter.
A noticeable share of the action so far involves solar technologies. Germany1 Acquisitions of Germany, for instance, paid $775 million to acquire AEG Power Solutions, a maker of inverters for solar panels, while late last year Siemens agreed to buy solar thermal company Solel of Israel and SunPower took out SunRay Renewable Energy, the Italian solar plant developer, in February.
In China, GCL-Poly Energy Holdings bought polysilicon wafer maker Jiangsu Zhongneng Polysilicon Technology Development.
But other deals looked beyond the segment. Solar City, for instance, announced in May it would buy the assets of energy remodeling contractor Building Solutions.
Erik Straser, a partner at Mohr Davidow Ventures, says the coming wave of deals could bring higher prices than comparable deals in high tech. That’s because target companies will need to be more mature, and their businesses will need to present obvious benefits to acquirers, such as a General Electric.
A GE acquisitions manager will need to show clear business benefits before a deal is done, he says. That clarity of purpose comes at a price.
Posted by Mark Boslet 
