Solar installations rose 35% globally last year, but you wouldn’t know it from the stock performance of publicly traded solar companies. Invesco’s Solar ETF, a broad gauge of the sector, dropped by 40% last year.
The “ongoing disconnect” between share price and opportunity led Stamford, Conn.-based Altus Power, one of the largest commercial scale solar providers, to explore strategic options last fall. The company has agreed to be acquired and taken private by TPG Rise Climate.
“This partnership strengthens our ability to serve both our community solar and commercial clients with clean electric power at a time when demand for power is expected to grow substantially,” said Altus’ Gregg Felton.
“TPG Rise Climate’s deep expertise in the clean energy sector, investment-oriented mindset and value-driven approach to infrastructure development aligns perfectly with our vision.” Altus Power, he added, will be better positioned to scale and innovate as a private company.
Solar premium
TPG’s Rise Climate Transition Infrastructure strategy offered a 66% premium to Altus’ share price as of Oct. 15, near its 52-week low, representing a $2.2 billion value. Altus “has established itself as a leader in commercial scale, clean power solutions with an exceptional track record of growth,” said TPG Rise Climate’s Scott Lebovitz.
TPG, with $229 billion in assets under management, has secured $2 billion in commitments for Rise Climate Infrastructure Fund I, an infrastructure impact fund with a $6 billion fundraising target. The firm has also raised a combined $6 billion for TPG Rise Climate Fund II and emerging markets-focused TPG Rise Climate Global South Initiative.
