Fresh Yet Familiar Firms Get Into M&A Advisory

By Onofrio Castiglia and Andrew Vitelli

Renewable energy investors are increasingly coming across a handful of sellside M&A advisors that are at once new and familiar. Onofrio Castiglia and Andrew Vitelli examine how some technical advisory firms have been expanding their offerings.

Firms historically known for their analytics and data prowess have either launched or are strengthening their existing M&A advisory capabilities using institutional knowledge and networks to market mostly smaller assets or portfolios.

One such firm, LevelTen Energy, has long been a matchmaker in the power-purchase agreement (PPA) market, is well known for its market intelligence reports and began running M&A processes in 2021. A battery-focused investor says he sees new mandates from Seattle, Washington-based LevelTen on a seemingly weekly basis.

Another firm that has moved to data from M&A advisory is Boulder, Colorado-headquartered Ascend Analytics, which has been scaling up its M&A advisory capabilities in the battery storage segment through its Ascend Energy Exchange (AEX) platform. Other market participants tell Infralogic that they are also increasingly seeing Fractal Energy Storage Consultants and its Texas-based advisory and energy storage service active in the marketplace.

Providing advisory services to developers who might not have the resources to run robust M&A processes could help more projects get built and, ultimately, more companies to scale, representatives of the firms told Infralogic. As US power demand continues to surge after decades of flatlined demand, offering M&A capabilities to more developers could create a pipeline for additional sidelined capital to flow into the market.

LevelTen is primarily helping sell assets smaller than 4 MW and portfolios larger than a gigawatt, according to Patrick Worrall, vice-president of M&A solutions. The firm’s larger transactions are around USD 50m, which won’t be pursued by larger investment banks, he said, adding that LevelTen is also willing to transact for lower fees.

“We aren’t really in competition with a Marathon or a Green Capital or a Piper [Sandler],” Worrall told Infralogic. “Our real competition is developers that just run the process themselves.”

LevelTen hired Worrall in 2020 to build out its asset marketplace. Last year, the firm’s M&A activity doubled from the year prior. It is set to double once again this year, with the company on track to run some 60 to 70 processes, Worrall said. LevelTen’s focus is on pre-construction solar and energy storage projects, though it has done a handful of wind deals as well.

Since launching its M&A practice, LevelTen has executed more than 5 GW of deals in North America. Worrall points to three main value propositions attracting sellers: The company’s distribution network, built over eight years as a renewables marketplace; efficient process execution; and market intelligence.

“We talk about having 90% of the developers in North America on our platform,” Worrall said of the firm’s ambition. “Because we see such volume, we know better than most what transactions are being executed and the prices at which they are being executed.”

LevelTen has roughly a dozen people on its developer engagement team, and four on its transactions executions team. This is a fraction of the firm’s 130 or so total employees. The company has a PPA marketplace, a market intelligence business, and – its latest offering – a tax credit marketplace. Still, Worrall said the M&A advisory segment has room to grow.

“We view ourselves as an egalitarian platform on the M&A side to provide the development community with an efficient way to transact,” he said. “Our ultimate goal would be to build on our technology and our software and be the go-to place.”

Ascending with Stored Energy

AEX, the M&A advisory wing of market intelligence and analytics provider Ascend Analytics, is vying for new and more mandates in the energy storage space, Managing Director Rahm Orenstein told Infralogic.

The firm has recently gone to market with an 850 MW portfolio of Belltown Power and issued an RFP for renewables projects for California’s Turlock Irrigation District. Infralogic recently reported that the firm has been hired by California storage developer EnerSmart.

AEX has engaged other developers, including CleanCapital, Peregrine Energy Solutions, and Golden State Renewables, a spokesperson for the firm confirmed.

Ascend’s clients in project development, which rely on the firm for a suite of services including planning, valuation, risk management and power market operations, often decide to flip the project or conduct some other asset transaction to fund construction around the time they reach the notice to proceed stage or another point in development.

At that point, Ascend positions itself as an M&A advisor to capture that business, Orenstein said. Focused on the energy transition, the firm’s AEX business is entirely focused on storage now, but is planning for growth in other verticals.

Orenstein has been with the firm for roughly six months and is re-locating to headquarters in Boulder, Colorado from Israel, he said. The platform, about two years old, will compete for new business in many storage markets as Ascend continues a trajectory of fast growth.

Fractal did not respond to requests for comment in time for publication.

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Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy transition. The company’s offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.