TPG Rise Climate, the climate investment arm of private equity firm TPG, is reportedly in discussions to acquire Altus Power, a leading provider of solar power solutions for commercial and residential properties. Sources familiar with the matter suggest a deal could be finalized in the coming weeks, potentially valuing Altus Power at nearly $650 million, plus approximately $1.1 billion in net debt.
Altus Power, headquartered in Stamford, Connecticut, boasts one of the largest portfolios of commercial-scale solar plants in the United States. The company’s expansive network generates approximately 1 gigawatt of power and includes energy storage and electric vehicle charging infrastructure. In October, Altus Power publicly announced its exploration of strategic alternatives, including a potential sale, fueled by increased demand for clean energy solutions.
The potential acquisition comes amidst a surge in demand for renewable energy, driven by the growing power needs of data centers and the burgeoning artificial intelligence sector. This increased demand has made clean energy providers like Altus Power attractive targets for infrastructure investors. TPG Rise Climate, with its $19 billion in assets under management, focuses on investments in companies committed to positive social and environmental impact, making Altus Power a potentially strong fit for its portfolio.
Despite a significant decline in share value since its 2021 public debut via a $1.6 billion merger with a special purpose acquisition company (SPAC), Altus Power has recently experienced a resurgence. The company reported a 30% year-over-year increase in revenue to $58.7 million for the quarter ending in September, accompanied by a 26% rise in net profit to $8.6 million. This improved performance is attributed to securing new commercial customers amidst the growing demand for renewable energy.
While the negotiations between TPG Rise Climate and Altus Power are advanced, the deal is not yet finalized. The possibility remains that another bidder could emerge or that an agreement may not be reached. Both Altus Power and TPG have declined to comment on the ongoing discussions. Major stakeholders in Altus Power include CBRE Group, holding a 15.38% stake, and Blackstone’s energy arm, with a 13.2% stake following a significant investment in the 2021 SPAC transaction.
This potential acquisition underscores the growing investment interest in the renewable energy sector, driven by increasing demand and the global push towards sustainable energy solutions. The outcome of these negotiations could significantly impact the landscape of the commercial solar power market in the United States. If successful, the acquisition would position TPG Rise Climate as a major player in the clean energy transition.
