Global smart grid sector sees M&A deals worth $17 billion in 2012

NEW DELHI: Merger and acquisition (M&A) transactions in the global smart grid sector in 2012 amounted to $ 17 billion, which included just one Indian deal, according to clean energy communications and consulting firm Mercom Capital Group.

According to Mercom, a total of 23 M&A transactions were executed in 2012, amounting to almost $ 17 billion compared to 30 transactions worth almost $ 5 billion in 2011.

The $ 183 million acquisition of smart grid and automation solutions provider ZIV Group by electrical transmission and distribution equipment company Crompton Greaves, was the only Indian transaction for 2012.

Smart grid in India has taken a prime place in all power sector discussions and programs thanks to the northern grid collapse last year which acted as a catalyst triggering heated discussions and reforms.

In terms of number of deals, however, M&A activity has been slowing down over the last few years. There were as many as 40 transactions in 2010, which got reduced to 30 in 2011 and further declined to just 23 in 2012, largely because "exits have been sparse", Mercom said.

Some of the top M&A transactions in 2012 were the $ 11.8 billion acquisition of Cooper Industries by Eaton; followed by the $ 2.3 billion acquisition of Elster, a smart meter company, acquired by UK investment company Melrose; and the $ 2 billion acquisition of Vivint, a security and home automation services company by Blackstone.

Other top M&A transactions were the $ 382 million acquisition of RuggedCom, a provider of rugged communications equipment like routers and ethernet switches for substations, which was acquired by Siemens.

Meanwhile, venture capital (VC) funding in the smart grid sector came in at $ 434 million in 40 deals, compared to $ 377 million in 50 deals in 2011.

There were a total of 66 investors that invested in 2012 compared to 92 investors in 2011, Mercom said.