The value of renewable energy infrastructure deals is outpacing conventional energy deals this year, with renewables exceeding the total transaction value of traditional energy for the first time.
Between January and Sept. 16, there were 844 renewable energy transactions worth a combined $34.1 billion, compared with 147 conventional energy infrastructure deals totaling $24.3 billion in all of 2020, Preqin data shows.
A number of tailwinds are driving the growth of energy mergers and acquisition transactions for both renewable energy and even traditional energy companies, said Kyle Seipert, managing director at Alvarez & Marsal Taxand LLC, which specializes in M&A transactions in the energy industry.
One of those tailwinds is a large supply of cash to invest without the "corresponding good assets that yields the returns clients are looking at," Mr. Seipert said. There is a wide array of buyers hunting for energy infrastructure companies. In addition to infrastructure funds, non-U.S. pension funds and non-U.S. energy companies are looking to invest in energy infrastructure companies, he said.
What's more, as of June 30, there were roughly 17 special purpose acquisition companies, designed to invest in green energy companies, that also are on the hunt for deals, he said. SPACs typically have about 24 months to spend the capital they raised, and many are halfway through that time period, Mr. Seipert said.