Infrastructure investment firm Energy Capital Partners has acquired prolific ‘mid-range’ energy storage project developer Convergent Energy + Power in a deal worth ‘several hundred million dollars’.
The deal was announced yesterday morning. Convergent Energy + Power CEO Johannes Ritterhausen told Energy-Storage.news that unlike some of the recent mergers and acquisitions of promising energy storage companies by big players (Total acquiring Saft and then Go Electric, Wartsila-Greensmith et al), this one is a financial acquisition, not a strategic one.
“The management and the teams here are staying exactly the same, we’re just scaling up,” Ritterhausen said.
“It’s very different when you have a strategic acquisition, not a financial acquisition. This is a financial acquisition. ECP doesn’t have a storage team that they’re going to merge us with, we’re not being integrated inside of somebody else’s product line and platform. We are the platform, and we’re getting funding from them. We’re still an independent but now [also] fully-capitalised storage developer.”
Convergent has become known for executing commercial and industrial energy storage projects in the range of about 5MW to 25MW as well as other distributed storage project types to some extent. The company has been particularly prominent in the booming Ontario market, where Ritterhausen said some 50% or so of its projects have been so far. This includes 21MWh of potential projects with Shell New Energies in the Canadian Province.
‘We wanted to put a lot of money into assets, they wanted to deploy a lot of money into an energy storage platform’
The overall market for energy storage remains relatively small, Ritterhausen said, pointing out that with the fairly modest 70MW of ESS it has deployed so far, Convergent is one of its biggest players in North America. Nonetheless, it is planning for huge growth in the market and wants to be poised to continue carving out market share.
“We had very supportive investors, but because of the size of our pipeline and the growth of our industry, we were looking for folks who would write larger and larger cheques, and so at the beginning of last year we started a process to identify who would be the sources of funding for our future growth. After running a comprehensive process we sort of arrived at Energy Capital Partners, which is energy targeted private equity fund that’s done US$19 billion over the past 15 years or so in the energy space in North America primarily. We wanted to put a lot of money into assets, they wanted to deploy a lot of money into an energy storage platform.”
The transaction was actually signed over in April 2019 but the two parties have held off from making the announcement until now. RItterhausen told Energy-Storage.news the investment is for “several hundred million dollars”, and that as well as the Convergent name and platform, ECP also gets its full pipeline including “opportunities that are either operating, in construction or contracted to be built.”
More to follow on this story…