Valuations Rise Rapidly as Competition for Deal Flow Intensifies
Although overall M&A deal volume declined in the second quarter of 2008 as global credit markets tightened and leverage became sparse, activity in the renewable energy sector remained strong. The industry continued to consolidate as companies sought to expand their energy-generation capacity through strategic acquisitions. The escalating competition for deal flow, particularly among the large, international power companies and specialized renewable energy companies, put upward pressure on valuation multiples. While it is still difficult to determine appropriate values for renewable energy transactions, average valuations increased to $4.2 million perMWof operating capacity. Compared to the cost of recent greenfield developments for approximately half that amount per MW, it appears that buyers are increasingly willing to pay significant premiums for attractive targets. Read complete report.
No comments:
Post a Comment