A new solar development company, Hawthorne Renewables, has launched its headquarters in Phoenix, Arizona. The company is the result of a merger between Power Capital Energy Group and Sulus Solar.
Since its beginnings in 2016, Portland, Oregon-based Sulus Solar scaled to deliver more than $150 million of solar projects across Oregon and Washington. The company is headed by two industry veterans, Colin Murphy and Conor Grogan.
“We’re incredibly proud of the success we’ve had and have a huge appetite to ramp up our operations with new infrastructure from this merger,” said Grogan.
The company is backed by Omnes Capital, a Paris-based green energy private equity firm valued north of $5 billion. Omnes Capital stated intent to invest over $250 million in the new Phoenix, Arizona-headquartered developer over the next three to four years.
Hawthorne Renewables said it targets 2 GW of operational solar assets over the next five to seven years. The company will develop, finance and operate projects. It will have a Portland office in addition to the Phoenix headquarters.
“We thoroughly analyzed a large set of potential development platform companies for our entry to the U.S., followed by extensive third-party legal and technical due diligence on the Sulus Solar platform,” said Justin Brown, co-founder and co-chief executive of Power Capital. “Conor and Colin stood above the pack as ideal partners amidst a dynamic and competitive market.”
In 2020 and 2021 mergers and acquisitions activity for renewables surged as valuations for platforms, which included project portfolios and corporate development teams that manage them, reached all-time highs.
There is a growing trend of international players acquiring experienced U.S. developers with strong project portfolios, and CohnReznick 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’s pair of 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.
“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,” said the March 2023 whitepaper.
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