Tuesday 7 May 2013, Amsterdam
“Power Quarterly Deals Analysis: M&A and Investment Trends – Q1 2013” report is a reliable source of essential data and analysis of mergers and acquisitions (M&As) and financing in the power industry. The report provides detailed information on M&As, equity/debt offerings, private equity (PE), venture financing and partnership transactions registered in the power industry in Q1 2013. The report offers detailed comparative data on the number of deals and deal values in the last five quarters segregated into deal types, segments, and geographies. Besides, the report furnishes information on the top PE, venture capital (VC), and advisory firms in the power industry. We derived the data presented in this report from proprietary in-house Power eTrack deals database, and through primary and secondary research.
M&A Activity Unchanged In Power Market In Q1 2013
M&As, which include change in ownership and control of companies (We does not consider this value as a new investment in the market), in the power industry remained unchanged with 119 deals each in Q4 2012 and Q1 2013. However, deal value registered a marginal increase from $17.7 billion in Q4 2012 to $18.1 billion in Q1 2013. On a year-on-year basis, M&As recorded a marginal increase in the number of deals and a decrease of 43% in deal value from 118 deals worth $31.6 billion in Q1 2012.
Europe remained the most attractive destination for M&As in Q1 2013. The region registered 46 deals worth $9.4 billion in Q1 2013, as compared to 37 deals worth $6.4 billion in Q4 2012, reflecting an increase of 24% in the number of deals and 48% in deal value.
The power industry recorded the highest number of M&A deals in the wind and solar segments with 25 deals each in Q1 2013, followed by hydro and energy efficiency segments with 12 and 10 deals respectively. In deal value, the hydro segment reported the highest deal value of $3.3 billion in Q1 2013, followed by fossil fuels segment with $2.7 billion.
Asset Financing Decreased In Power Industry In Q1 2013
Asset financing, including project financing, self-funded, tax equity, lease and bond financing, and bridge loans for new building projects, acquisitions, and the refinancing of assets, registered a decrease of 20%n the number of deals and 37% in deal value with 236 deals worth $52.9 billion in Q1 2013, as compared to 294 deals worth $83.7 billion in Q4 2012. On a year-on-year basis, asset financing recorded a marginal increase of 4% in the number of deals and a decrease of 13% in deal value from 228 deals worth $61.1 billion in Q1 2012.
The solar and fossil fuel segments registered a decrease in the number of deals and investments with 58 deals worth $9 billion and 42 deals worth $20.4 billion in Q1 2013, as compared to 88 deals worth $15.5 billion and 56 deals worth $33.6 billion respectively in Q4 2012. The deal value in hydro market decreased substantially to $5.7 billion in Q1 2013 from $23 billion in Q4 2012, though the number of deals increased marginally from 48 deals to 49 deals.
Project financing, which represents deals that have been financed through debt from banks, financial institutions or government grants, recorded a decrease of 28% in number and 52% in deal value with 98 deals worth $15.5 billion in Q1 2013, as compared to 137 deals worth $32.1 billion in Q4 2012. On a yearon- year basis, project financing recorded a decrease of 5% in the number of deals and 9% in deal value from 103 deals worth $17.1 billion in Q1 2012.
Self-funded projects, which include projects that have been financed through the company’s own finances either in cash or stock, registered a decrease of 12% in the number of deals and 28% in deal value with135 deals worth $37.1 billion in Q1 2013, as compared to 154 deals worth $51.6 billion in Q4 2012. On a year-on-year basis, self-funded projects recorded an increase of 13% in the number of deals and a decrease of 14% in deal value from 120 deals worth $43.3 billion in Q1 2012.
Asset Transactions Decreased In Power Industry In Q1 2013
Asset acquisition in the power industry registered 19% decrease in number and a substantial increase of 63% in deal value in Q1 2013. The market registered 105 deals worth $13.4 billion in Q1 2013, as compared to 129 deals worth $9.4 billion in Q4 2012. Shell’s agreement to acquire a minority stake in LNG assets, associated contracts and time charters in Peru, Trinidad and Tobago, and BBE power plant in Spain from Repsol for $6.7 billion was the high-value asset acquisition, which contributed the highest to the deal value in Q1 2013.
North America accounted for 42% of the total deals and 62% of the total deal value in asset transactions segment, in Q1 2013, with 44 deals worth $4.2 billion, followed by Europe with 43 deals worth $2.2 billion, constituting 41% of the total deals and 32% of the total deal value.
The wind segment registered the highest number of asset acquisitions with 34 deals worth $1.7 billion, constituting 32% of the total deals in Q1 2013, followed by solar with 29 deals worth $273m and fossil fuels with 18 deals worth $2.4 billion.
Capital Raising Through Debt Offerings Decreased In Q1 2013
The raising of capital, through debt offerings, registered a decrease in the number of deals and deal value with 92 deals worth $39.8 billion in Q1 2013, as compared to 97 deals worth $53.9 billion in Q4 2012, reflecting a decrease of 5% in number and 26% in value. On a year-on-year basis, debt offerings recorded a decrease of 14% in the number of deals and 37% in deal value from 107 deals worth $63.3 billion in Q1 2012.
Public debt offerings registered a decrease of 19% in the number of deals and 35% in deal value with 58 deals worth $29.1 billion in Q1 2013, as compared to 72 deals worth $45 billion in Q4 2012.
Private debt placements registered an increase of 20% in deal value with $10.7 billion in Q1 2013, as compared to $8.9 billion in Q4 2012. The number of deals also increased from 25 in Q4 2012 to 34 in Q1 2013.
The majority of the debt capital was raised by companies in Europe with 34 deals worth $25.2 billion in Q1 2013, followed by the companies in North America with 28 deals worth $5.7 billion and Asia-Pacific with 25 deals worth $6.6 billion.
Deals Decreased In North America And Increased In Europe In Q1 2013
North America recorded a decrease in the number of deals and deal value with 265 deals worth $37.9 billion in Q1 2013, as compared to 316 deals worth $56.8 billion in Q4 2012, reflecting a decrease of 16% in number and 33% in value. On a year-on-year basis, the number of deals registered a decrease of 26% from 357 in Q1 2012 and 29% in deal value from $53.4 billion in Q1 2012.
Europe registered an increase of 42% in deal value from $38.7 billion in Q4 2012 to $54.8 billion in Q1 2013. The large difference in deal value was due to some of the high value deals such as Energeticky A Prumyslovy’s acquisition of Slovak Gas from GDF Suez and E.ON for $3.48 billion and EDF’s private placement of 5.25% bonds for $3 billion recorded in Q1 2013. The number of deals also registered an increase of 13% with 219 in Q1 2013, as compared to 194 in Q4 2012
