M&A in the USA: What happens next?

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August.

Richard Heap
October 20, 2022
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This content is from our archive. Some formatting or links may be broken.
M&A in the USA: What happens next?

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August. We saw this investor confidence in three deals that closed at the end of the third quarter.

On Thursday 29th September, Brookfield Renewables agreed a $1bn deal to acquire Scout Clean Energy from Quinbrook Infrastructure Partners.

Scout operates 1.2GW of wind farms in four US states, of which 400MW is for third parties, and is planning to deliver 22GW of wind, solar and storage projects across 24 states by 2030.

Michael Rucker, CEO and founder of Scout, said the passing of the IRA makes this the “right time for Scout to move into the next phase of our growth”. This deal means Brookfield has a diversified renewables project pipeline of 60GW.

That Thursday also brought news of another takeover of a major US developer by a Canadian player, as Enbridge agreed to pay $270m for Texas developer Tri Global Energy and take on its debt.

Tri Global has 7GW of wind and solar in development, of which it is looking to put 3GW into service between 2024 and 2028. Enbridge said this deal would accelerate its plans in North America, as well as the growth of Tri Global.

Finally, on Saturday 1st October, German utility RWE announced that it was buying the renewables arm of New York utility Con Edison.

The transaction reflected an enterprise value of $6.8bn. Con Edison has 3GW of operational renewables, of which 90% is in solar, and a 7GW pipeline. Qatar Investment Authority backed RWE in the deal.

RWE said this deal would make it the fourth-largest renewables company in the US. The transaction is due to close in the first half of 2023.

That three companies with large portfolios have been bought is no great surprise. It has been a feature of the US market in recent years that firms with large portfolios of renewables developments have been bought by large utilities or institutions. Some of these keep operating under the same names (Apex, Invenergy, Pattern) while others have been subsumed into their parent groups (Infinity, Lincoln, Tradewind).

These merger and acquisition (M&A) deals give the acquiring parties access to large development portfolios as well as skills to deliver them; and the acquired companies gain financial clout to deliver on their plans.

We expect the IRA will only provide extra momentum to M&A activity in the US – but who will be the new acquisition targets?

Acquisition targets

Superficially, there are similarities between the deals for Tri Global, Scout and the renewables arm of Con Edison, because companies with sizeable portfolios were bought.

There are significant differences though. The main one is who sold them: Tri Global was privately owned, Scout was investor-owned, and the Con Edison arm was part of a utility. The IRA will provide momentum for deals of all kinds, such as Duke Energy’s planned $4bn disposal of its renewable energy business.

For us, the most interesting deal of the three was Tri Global.

The company was one of the largest privately-owned developers in the US, and our view is that most of the biggest and most attractive private developers have now been bought. There will be demand for those that remain because of the boost to US renewables from the IRA, but buyers will have to run the rule over future deals to ensure they receive value.

Our sense is that the next generation of attractive private developers will be those not primarily defined by the size of their portfolios, but the different skills that they can open up for whoever buys them.

This could be access to new technologies like long-duration storage or green fuel production paired with renewables generation. It could be new approaches to the repowering or asset management of ageing wind assets. Or it could be opening up new income streams, such as by providing services that help grid operators ensure stability of grids with more intermittent renewables.

It seems clear, though, that competition for development assets will be so fierce that it is tough for new entrants to build multi-gigawatt development portfolios that appeal to utilities or institutional investors. Not impossible, but many of the sector’s smartest developers are now backed by investors with deep pockets and big ambitions. These will provide formidable opponents for newer players entering the market.

The IRA did not start the run of M&A deals that led to three big closings at the end of the third quarter, but it certainly added urgency to complete them. There will also be no shortage of investor demand for future deals, but finding targets could be harder.

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August. We saw this investor confidence in three deals that closed at the end of the third quarter.

On Thursday 29th September, Brookfield Renewables agreed a $1bn deal to acquire Scout Clean Energy from Quinbrook Infrastructure Partners.

Scout operates 1.2GW of wind farms in four US states, of which 400MW is for third parties, and is planning to deliver 22GW of wind, solar and storage projects across 24 states by 2030.

Michael Rucker, CEO and founder of Scout, said the passing of the IRA makes this the “right time for Scout to move into the next phase of our growth”. This deal means Brookfield has a diversified renewables project pipeline of 60GW.

That Thursday also brought news of another takeover of a major US developer by a Canadian player, as Enbridge agreed to pay $270m for Texas developer Tri Global Energy and take on its debt.

Tri Global has 7GW of wind and solar in development, of which it is looking to put 3GW into service between 2024 and 2028. Enbridge said this deal would accelerate its plans in North America, as well as the growth of Tri Global.

Finally, on Saturday 1st October, German utility RWE announced that it was buying the renewables arm of New York utility Con Edison.

The transaction reflected an enterprise value of $6.8bn. Con Edison has 3GW of operational renewables, of which 90% is in solar, and a 7GW pipeline. Qatar Investment Authority backed RWE in the deal.

RWE said this deal would make it the fourth-largest renewables company in the US. The transaction is due to close in the first half of 2023.

That three companies with large portfolios have been bought is no great surprise. It has been a feature of the US market in recent years that firms with large portfolios of renewables developments have been bought by large utilities or institutions. Some of these keep operating under the same names (Apex, Invenergy, Pattern) while others have been subsumed into their parent groups (Infinity, Lincoln, Tradewind).

These merger and acquisition (M&A) deals give the acquiring parties access to large development portfolios as well as skills to deliver them; and the acquired companies gain financial clout to deliver on their plans.

We expect the IRA will only provide extra momentum to M&A activity in the US – but who will be the new acquisition targets?

Acquisition targets

Superficially, there are similarities between the deals for Tri Global, Scout and the renewables arm of Con Edison, because companies with sizeable portfolios were bought.

There are significant differences though. The main one is who sold them: Tri Global was privately owned, Scout was investor-owned, and the Con Edison arm was part of a utility. The IRA will provide momentum for deals of all kinds, such as Duke Energy’s planned $4bn disposal of its renewable energy business.

For us, the most interesting deal of the three was Tri Global.

The company was one of the largest privately-owned developers in the US, and our view is that most of the biggest and most attractive private developers have now been bought. There will be demand for those that remain because of the boost to US renewables from the IRA, but buyers will have to run the rule over future deals to ensure they receive value.

Our sense is that the next generation of attractive private developers will be those not primarily defined by the size of their portfolios, but the different skills that they can open up for whoever buys them.

This could be access to new technologies like long-duration storage or green fuel production paired with renewables generation. It could be new approaches to the repowering or asset management of ageing wind assets. Or it could be opening up new income streams, such as by providing services that help grid operators ensure stability of grids with more intermittent renewables.

It seems clear, though, that competition for development assets will be so fierce that it is tough for new entrants to build multi-gigawatt development portfolios that appeal to utilities or institutional investors. Not impossible, but many of the sector’s smartest developers are now backed by investors with deep pockets and big ambitions. These will provide formidable opponents for newer players entering the market.

The IRA did not start the run of M&A deals that led to three big closings at the end of the third quarter, but it certainly added urgency to complete them. There will also be no shortage of investor demand for future deals, but finding targets could be harder.

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August. We saw this investor confidence in three deals that closed at the end of the third quarter.

On Thursday 29th September, Brookfield Renewables agreed a $1bn deal to acquire Scout Clean Energy from Quinbrook Infrastructure Partners.

Scout operates 1.2GW of wind farms in four US states, of which 400MW is for third parties, and is planning to deliver 22GW of wind, solar and storage projects across 24 states by 2030.

Michael Rucker, CEO and founder of Scout, said the passing of the IRA makes this the “right time for Scout to move into the next phase of our growth”. This deal means Brookfield has a diversified renewables project pipeline of 60GW.

That Thursday also brought news of another takeover of a major US developer by a Canadian player, as Enbridge agreed to pay $270m for Texas developer Tri Global Energy and take on its debt.

Tri Global has 7GW of wind and solar in development, of which it is looking to put 3GW into service between 2024 and 2028. Enbridge said this deal would accelerate its plans in North America, as well as the growth of Tri Global.

Finally, on Saturday 1st October, German utility RWE announced that it was buying the renewables arm of New York utility Con Edison.

The transaction reflected an enterprise value of $6.8bn. Con Edison has 3GW of operational renewables, of which 90% is in solar, and a 7GW pipeline. Qatar Investment Authority backed RWE in the deal.

RWE said this deal would make it the fourth-largest renewables company in the US. The transaction is due to close in the first half of 2023.

That three companies with large portfolios have been bought is no great surprise. It has been a feature of the US market in recent years that firms with large portfolios of renewables developments have been bought by large utilities or institutions. Some of these keep operating under the same names (Apex, Invenergy, Pattern) while others have been subsumed into their parent groups (Infinity, Lincoln, Tradewind).

These merger and acquisition (M&A) deals give the acquiring parties access to large development portfolios as well as skills to deliver them; and the acquired companies gain financial clout to deliver on their plans.

We expect the IRA will only provide extra momentum to M&A activity in the US – but who will be the new acquisition targets?

Acquisition targets

Superficially, there are similarities between the deals for Tri Global, Scout and the renewables arm of Con Edison, because companies with sizeable portfolios were bought.

There are significant differences though. The main one is who sold them: Tri Global was privately owned, Scout was investor-owned, and the Con Edison arm was part of a utility. The IRA will provide momentum for deals of all kinds, such as Duke Energy’s planned $4bn disposal of its renewable energy business.

For us, the most interesting deal of the three was Tri Global.

The company was one of the largest privately-owned developers in the US, and our view is that most of the biggest and most attractive private developers have now been bought. There will be demand for those that remain because of the boost to US renewables from the IRA, but buyers will have to run the rule over future deals to ensure they receive value.

Our sense is that the next generation of attractive private developers will be those not primarily defined by the size of their portfolios, but the different skills that they can open up for whoever buys them.

This could be access to new technologies like long-duration storage or green fuel production paired with renewables generation. It could be new approaches to the repowering or asset management of ageing wind assets. Or it could be opening up new income streams, such as by providing services that help grid operators ensure stability of grids with more intermittent renewables.

It seems clear, though, that competition for development assets will be so fierce that it is tough for new entrants to build multi-gigawatt development portfolios that appeal to utilities or institutional investors. Not impossible, but many of the sector’s smartest developers are now backed by investors with deep pockets and big ambitions. These will provide formidable opponents for newer players entering the market.

The IRA did not start the run of M&A deals that led to three big closings at the end of the third quarter, but it certainly added urgency to complete them. There will also be no shortage of investor demand for future deals, but finding targets could be harder.

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August. We saw this investor confidence in three deals that closed at the end of the third quarter.

On Thursday 29th September, Brookfield Renewables agreed a $1bn deal to acquire Scout Clean Energy from Quinbrook Infrastructure Partners.

Scout operates 1.2GW of wind farms in four US states, of which 400MW is for third parties, and is planning to deliver 22GW of wind, solar and storage projects across 24 states by 2030.

Michael Rucker, CEO and founder of Scout, said the passing of the IRA makes this the “right time for Scout to move into the next phase of our growth”. This deal means Brookfield has a diversified renewables project pipeline of 60GW.

That Thursday also brought news of another takeover of a major US developer by a Canadian player, as Enbridge agreed to pay $270m for Texas developer Tri Global Energy and take on its debt.

Tri Global has 7GW of wind and solar in development, of which it is looking to put 3GW into service between 2024 and 2028. Enbridge said this deal would accelerate its plans in North America, as well as the growth of Tri Global.

Finally, on Saturday 1st October, German utility RWE announced that it was buying the renewables arm of New York utility Con Edison.

The transaction reflected an enterprise value of $6.8bn. Con Edison has 3GW of operational renewables, of which 90% is in solar, and a 7GW pipeline. Qatar Investment Authority backed RWE in the deal.

RWE said this deal would make it the fourth-largest renewables company in the US. The transaction is due to close in the first half of 2023.

That three companies with large portfolios have been bought is no great surprise. It has been a feature of the US market in recent years that firms with large portfolios of renewables developments have been bought by large utilities or institutions. Some of these keep operating under the same names (Apex, Invenergy, Pattern) while others have been subsumed into their parent groups (Infinity, Lincoln, Tradewind).

These merger and acquisition (M&A) deals give the acquiring parties access to large development portfolios as well as skills to deliver them; and the acquired companies gain financial clout to deliver on their plans.

We expect the IRA will only provide extra momentum to M&A activity in the US – but who will be the new acquisition targets?

Acquisition targets

Superficially, there are similarities between the deals for Tri Global, Scout and the renewables arm of Con Edison, because companies with sizeable portfolios were bought.

There are significant differences though. The main one is who sold them: Tri Global was privately owned, Scout was investor-owned, and the Con Edison arm was part of a utility. The IRA will provide momentum for deals of all kinds, such as Duke Energy’s planned $4bn disposal of its renewable energy business.

For us, the most interesting deal of the three was Tri Global.

The company was one of the largest privately-owned developers in the US, and our view is that most of the biggest and most attractive private developers have now been bought. There will be demand for those that remain because of the boost to US renewables from the IRA, but buyers will have to run the rule over future deals to ensure they receive value.

Our sense is that the next generation of attractive private developers will be those not primarily defined by the size of their portfolios, but the different skills that they can open up for whoever buys them.

This could be access to new technologies like long-duration storage or green fuel production paired with renewables generation. It could be new approaches to the repowering or asset management of ageing wind assets. Or it could be opening up new income streams, such as by providing services that help grid operators ensure stability of grids with more intermittent renewables.

It seems clear, though, that competition for development assets will be so fierce that it is tough for new entrants to build multi-gigawatt development portfolios that appeal to utilities or institutional investors. Not impossible, but many of the sector’s smartest developers are now backed by investors with deep pockets and big ambitions. These will provide formidable opponents for newer players entering the market.

The IRA did not start the run of M&A deals that led to three big closings at the end of the third quarter, but it certainly added urgency to complete them. There will also be no shortage of investor demand for future deals, but finding targets could be harder.

The US has become one of the world’s hottest renewables investment markets due to the Inflation Reduction Act, which became law in August. We saw this investor confidence in three deals that closed at the end of the third quarter.

On Thursday 29th September, Brookfield Renewables agreed a $1bn deal to acquire Scout Clean Energy from Quinbrook Infrastructure Partners.

Scout operates 1.2GW of wind farms in four US states, of which 400MW is for third parties, and is planning to deliver 22GW of wind, solar and storage projects across 24 states by 2030.

Michael Rucker, CEO and founder of Scout, said the passing of the IRA makes this the “right time for Scout to move into the next phase of our growth”. This deal means Brookfield has a diversified renewables project pipeline of 60GW.

That Thursday also brought news of another takeover of a major US developer by a Canadian player, as Enbridge agreed to pay $270m for Texas developer Tri Global Energy and take on its debt.

Tri Global has 7GW of wind and solar in development, of which it is looking to put 3GW into service between 2024 and 2028. Enbridge said this deal would accelerate its plans in North America, as well as the growth of Tri Global.

Finally, on Saturday 1st October, German utility RWE announced that it was buying the renewables arm of New York utility Con Edison.

The transaction reflected an enterprise value of $6.8bn. Con Edison has 3GW of operational renewables, of which 90% is in solar, and a 7GW pipeline. Qatar Investment Authority backed RWE in the deal.

RWE said this deal would make it the fourth-largest renewables company in the US. The transaction is due to close in the first half of 2023.

That three companies with large portfolios have been bought is no great surprise. It has been a feature of the US market in recent years that firms with large portfolios of renewables developments have been bought by large utilities or institutions. Some of these keep operating under the same names (Apex, Invenergy, Pattern) while others have been subsumed into their parent groups (Infinity, Lincoln, Tradewind).

These merger and acquisition (M&A) deals give the acquiring parties access to large development portfolios as well as skills to deliver them; and the acquired companies gain financial clout to deliver on their plans.

We expect the IRA will only provide extra momentum to M&A activity in the US – but who will be the new acquisition targets?

Acquisition targets

Superficially, there are similarities between the deals for Tri Global, Scout and the renewables arm of Con Edison, because companies with sizeable portfolios were bought.

There are significant differences though. The main one is who sold them: Tri Global was privately owned, Scout was investor-owned, and the Con Edison arm was part of a utility. The IRA will provide momentum for deals of all kinds, such as Duke Energy’s planned $4bn disposal of its renewable energy business.

For us, the most interesting deal of the three was Tri Global.

The company was one of the largest privately-owned developers in the US, and our view is that most of the biggest and most attractive private developers have now been bought. There will be demand for those that remain because of the boost to US renewables from the IRA, but buyers will have to run the rule over future deals to ensure they receive value.

Our sense is that the next generation of attractive private developers will be those not primarily defined by the size of their portfolios, but the different skills that they can open up for whoever buys them.

This could be access to new technologies like long-duration storage or green fuel production paired with renewables generation. It could be new approaches to the repowering or asset management of ageing wind assets. Or it could be opening up new income streams, such as by providing services that help grid operators ensure stability of grids with more intermittent renewables.

It seems clear, though, that competition for development assets will be so fierce that it is tough for new entrants to build multi-gigawatt development portfolios that appeal to utilities or institutional investors. Not impossible, but many of the sector’s smartest developers are now backed by investors with deep pockets and big ambitions. These will provide formidable opponents for newer players entering the market.

The IRA did not start the run of M&A deals that led to three big closings at the end of the third quarter, but it certainly added urgency to complete them. There will also be no shortage of investor demand for future deals, but finding targets could be harder.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.