Solar M&A activity in Q3 signals start of industry consolidation, says Mercom Capital

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  M&A activity in the third quarter could signal the start of a period of consolidation within the PV industry. Mercom Capital reported that there was US$563 million spent in 20 M&A transactions in the quarter with details disclosed for only eight of these deals.
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  VC funding in the PV sector reached US$372 million, compared to US$354 million in Q2 2011. Mercom Capital noted that 42 different VC investors participated in 29 disclosed deals.

According to the latest quarterly report from Mercom Capital Group, M&A activity in the third quarter could signal the start of a period of consolidation within the PV industry. Mercom Capital reported that there was US$563 million spent in 20 M&A transactions in the quarter with details disclosed for only eight of these downstream market deals.

Mercom Capital noted that this was the highest number of transactions in a quarter since 2010, with the most prominent transactions being the acquisition of Solar Silicon Valley by China-based JA Solar for US$180 million and Fotowatio Renewable Ventures acquisition by MEMC for US$131 million.

According to Mercom Capital this was part of a trend in the quarter with downstream companies attracting the most funding in the quarter closely followed by thin-film companies, with US$130 million in 11 deals and US$125 million in five deals respectively.

VC funding in the PV sector reached US$372 million, compared to US$354 million in Q2 2011. Mercom Capital noted that 42 different VC investors participated in 29 disclosed deals.

"VC funding so far this year is on pace with 2010 and M&A activity is picking up," commented Raj Prabhu, managing partner at Mercom Capital Group. "The number of M&A transactions in 2011 has already surpassed 2010 numbers, signalling that the move towards industry consolidation may have begun."