Renewable energy attracting investors
Merger and acquisition (M&A) activity in the North American power and utilities industry increased in the third quarter of 2013 on both a year-over-year and sequential quarter basis as dealmakers in the industry continue to consider opportunistic M&A to achieve strategic growth, according to PwC U.S.
The report notes there were 12 power and utilities transactions greater than $50 million in the third quarter of 2013, compared to seven deals in the previous quarter and eight during the third quarter of 2012. While volume increased, the total value of deals worth $50 million or more declined to $4.6 billion from $12.5 billion in the second quarter of 2013, largely due to one mega deal worth $10.4 billion in the second quarter. Excluding that deal, third quarter total value increased 115 percent over the second quarter's total of $2.1 billion.
Strategic investors accounted for 72 percent of deal value in the third quarter of 2013, according to the report, compared to 100 percent in the second quarter, as the sector increased financial investor activity.
There were three renewable power deals in the third quarter of 2013.
"We saw a notable rise in deal activity in the third quarter and expect that activity to continue in future quarters as the hunt for yield and rebalancing of portfolios continues," said Jeremy Fago, PwC's U.S. power & utilities deals leader. "Renewables continue to attract investors seeking stable, predictable cash flows and we expect the industry to continue its consolidation as thirst for yield and uncertainty around incentives remains."
- see this report