Altus Power Up for Sale: Solar Energy Company Hires M&A Experts, Seeks Buyers

Amid a slumping stock price, Altus Power has hired M&A advisors and appears to be up for sale. The solar energy company's board has 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.

Altus Power's stock is down 56% from January 2024 through October 16, 2024 -- while overall public markets are up roughly 20% and many U.S. stock indices are at or near all-time highs.

Altus Power's market cap was $483 million as of October 16, 2024, according to SeekingAlpha.

Solar Energy Market Growth, Challenges

Demand for solar energy continues to grow but competition remains fierce. 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.

Among the additional challenges: Heightened interest rates make it difficult for customers to finance new solar projects. And reduced government incentives have pressured the solar energy market in California.

The complex market challenges have impacted multiple solar energy companies in 2024. For example:

• SunPower filed for bankruptcy and had layoffs, SiliconValley.com reported.
• SolarEdge laid off 400 employees, of which 200 were in Israel, in a quest to restore profitability and ensure financial stability, Reuters reported. This was the second round of SolarEdge Layoffs in 2024.
• Longi Green Technology Energy Co., the world’s largest solar manufacturer, cut almost one-third of its staff.

Related: See all layoffs in the sustainability market listed here.

Altus Power Business Performance, Potential Sale

Despite the various market challenges, Altus Power has been growing. In the Q2 of 2024:

• Revenue was $52.5 million in Q2 , up 13% compared to Q2 of 2023.
• GAAP net income was $33.1 million, compared to $3.4 million in Q2 of 2023.

In the August 2024 earnings statement, Altus Power CEO Gregg Felton: "Altus Power has assembled a portfolio of highly attractive assets that will generate long-term value for our investors. In Q2 2024, we continued to prudently scale our portfolio and capitalize on long-term growth opportunities. Over the past five years, our flexible and agile but disciplined approach has allowed us to increase our revenues and adjusted EBITDA four-fold, while building the largest nationwide portfolio in the commercial solar market."

Altus Power Hires M&A Experts, Seeks Buyers

So what's next? Altus Power has hired Moelis & Company and Latham & Watkins to assist with the strategic business review.

• Moelis & Company's expertise spans M&A and Strategic Advisory, Capital Structure Advisory, Capital Markets and Private Funds Advisory services.
• Latham & Watkins is one of the world's largest law firms, and the organization has a dedicated M&A practice.

Altus Power expects the strategic review process to be completed by the first half of 2025.

The goal is to "assess and determine the strategic alternatives that will unlock shareholder value and optimize access to capital for the company." Again, that means the company wants to hear buyout bids or financial ideas for the business.

Altus Power plans no further comment about the effort until "the Board has approved a specific transaction, the process has otherwise concluded, or the company has otherwise determined that further disclosure is appropriate or necessary."