Hull Street Energy, a middle market energy investment firm, announced the sale of utility solar development company Foundation Solar Partners to Birch Creek Energy.
Based in Washington, D.C., Foundation Solar is comprised of a team of solar industry veterans that have developed, acquired and managed over 6 GW of generation assets over the past two decades. The team brought their expertise together in 2019, founding Foundation Solar.
Lazard advised Hull Street Energy on the sale, while Foley & Lardner LLP was counsel to the private equity firm. Nelson Mullins Riley & Scarborough LLP was counsel to Birch Creek Energy.
Hull Street Energy is a private equity firm specializing in the power sector and energy transition investments. The company has expertise in North American electricity infrastructure, fundamentals and grid operations, including fuel inputs, commodity contract structuring, renewable and fossil powered generation assets, energy storage, transmission and distribution systems, and electricity demand-side businesses.
Based in St. Louis, Birch Creek Energy was formed in 2019 and focuses on the development, financing, and ownership of utility-scale solar and storage projects. The company has developed 872 MW of solar assets and has a pipeline exceeding 8 GW across the MISO, PJM, ERCOT and Southeast markets.
Throughout 2020 and 2021, merger and acquisition activity for renewables surged as valuations for platforms, which included project portfolios and corporate development teams that manage them, reached all-time highs. Now with increasing capital deployment rates, there is a shift from majority platform M&A activity to transactions in which investors could take a minority stake
There is a growing trend of international players acquiring experienced U.S. developers with strong project portfolios, and CohnReznick Capital Markets said it expects this trend to continue in 2023. International independent power producers and infrastructure funds see acquisition as an efficient tool to enter or expand their presence in the growing North American market. Corporate M&A activity that includes developer experience and a portfolio of projects offers scale and transaction efficiency that the acquisition of individual projects aren’t able to match.
FTI Consulting said in a whitepaper that notable 2022 M&A transactions included Brookfield Renewable Energy’s acquisitions of Scout Clean Energy ($1 billion) and Standard Solar ($540 million), Enbridge’s acquisition of Texas wind developer Tri-Global Energy for $270 million, and German energy producer RWE AG’s acquisition of Con Edison’s Clean Energy Businesses for $6.8 billion.
The consulting firm said that 2023 deal flow is expected to remain strong, but creative solutions and investor flexibility will be needed as the market navigates persistent supply chain challenges, long interconnection queues, and high inflation rates, all of which will apply downward pressure on asset sales.
“With patience, we anticipate strong M&A activity in traditional renewable assets, platforms and emerging technologies trending toward the second half of 2023 and into 2024 as greater clarity and increased value creation are established,” FTI Consulting said.
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