Private equity firm TPG is in talks to potentially acquire solar energy firm Altus Power, according to Reuters. Additional suitors could potentially emerge but there's no guarantee Altus power will be sold, the report noted.
Altus Power's market cap is roughly $652 million as of December 24. The company has been up for sale since about October 2024. Around that time, the solar energy company's board launched a "formal review of strategic alternatives" -- which is financial jargon that means Altus Power would welcome acquisition offers and buyout proposals from potential bidders.
For Q3 of 2024, Altus Power in November 2024 reported:
- Revenue of $58.7 million, up 30% from Q3 of 2023.
- Net income of $8.6 million, up from $6.8 million in Q3 of 2023.
- Adjusted EBITDA of $37 million, up 27% from Q3 of 2023.
Solar Energy Market Growth, Industry Challenges
At first glance, the solar energy market looks healthy. Worldwide solar capacity will grow 29% in 2024 compared to 2023, Ember predicts. Roughly 75% of those new installs will occur in China, the United States, India, Germany and Brazil, the researcher said.
But take a closer look and multiple factors have crushed numerous solar energy technology companies in 2024. Among the challenges: Heightened interest rates -- at least compared to the Zero Interest Rate Policy (ZIRP) years -- have forced some consumers and businesses to abandon or delay financing for potential solar projects. The situation is particularly challenging in California, which slashed solar power incentives in 2023.
Meanwhile, some Chinese manufacturers, in particular, appear to have a technology lead over their U.S. counterparts -- though the Biden administration has been pushing tariffs on solar cell technology imports.
Amid that backdrop, Altus Power's stock is down roughly 40% so far in 2024 (as of pre-market trading on December 24) -- even after shares jumped about 15% on December 23 amid the M&A rumors.
About Potential Altus Power buyer TPG
TPG, founded in 1992, is based in Fort Worth, Texas. The company has roughly $222 billion in assets under management. TPG launched a climate-focused fund in 2021.
Stay tuned for potential updates on the potential Altus Power company sale.
