About Peachtree Green Advisors2009

PEACHTREE GREEN ADVISORSGREEN TECHNOLOGY

2009 Introduction to

PEACHTREE GREEN ADVISORS

A Division of Peachtree Media Advisors, Inc.

PEACHTREE GREEN ADVISORSGREEN TECHNOLOGY 2

DiscussionI. About Peachtree Green Advisors

II. Clean Tech Defined & Market Trends

III. M&A Environment

IV. Public Market Company Valuations

V. Why Peachtree Green Advisors, Inc.

VI. The Peachtree Sale Process

This introductory About Us presentation is an evolving work in progress and will be updated frequently


ABOUT PEACHTREE

3


Peachtree provides investment banking services on growth and smaller middle market transactions in the media, tech and

clean-tech/renewable energy sectors

Over 22 completed transactions

Focus on maximizing value at each stage of the process

Substantial insight in core industry markets – 12+ years of focus in media and tech industries

Senior level access to leading industry executives, investors and entrepreneurs

In-depth technical and financial skills for value-enhancing deal structuring

About Peachtree

InsightInsight

ServiceService

FocusFocus


About Peachtree Services

Sales and Divestitures – Peachtree maximizes value on the sale of properties or the divestiture of non-strategic assets through a controlled auction process; and

Sales and Divestitures – Peachtree maximizes value on the sale of properties or the divestiture of non-strategic assets through a controlled auction process; and

Mergers and Acquisitions – Peachtree maximizes value for sell side clients as well as strategic and financial buyers seeking add-on or platform acquisitions;

Mergers and Acquisitions – Peachtree maximizes value for sell side clients as well as strategic and financial buyers seeking add-on or platform acquisitions;

Capital Raise – Peachtree has a substantial amount of experience helping companies raise growth and acquisition financing from venture capital and private equity firms;

Capital Raise – Peachtree has a substantial amount of experience helping companies raise growth and acquisition financing from venture capital and private equity firms;

DOE Grant Advisory – Peachtree offers unparalleled federal grant writing expertise, transforming ideas into optimal proposals that provide the best opportunity to obtain government funding;

DOE Grant Advisory – Peachtree offers unparalleled federal grant writing expertise, transforming ideas into optimal proposals that provide the best opportunity to obtain government funding;

Strategic Partner/Business Development – With unprecedented insight into end user needs, an ability to navigate markets and analyze revenue models, Peachtree is able to assist lower-middle market companies in developing strategic relationships inorder to drive revenue growth.

Strategic Partner/Business Development – With unprecedented insight into end user needs, an ability to navigate markets and analyze revenue models, Peachtree is able to assist lower-middle market companies in developing strategic relationships inorder to drive revenue growth.


ENERGY TRENDS

6


U.S. Fuel Sources Used in Electricity Generaton 2005

Nuclear

Oil

Gas

Coal

Hydro

Energy in the US in 2008Three primary uses of energy

Electricity

Heat

Transportation

In 2008, the U.S. consumed 99.2 quadrillion BTUs

An average of 339.2 million BTU per person (relatively consistent for the past 30 yrs)

Fossil fuels (coal, natural gas, and petroleum) accounted for 84% of this consumption (83.4 quadrillion BTUs)

7

Source: Energy Information Administration 2005

2008 US Energy Consumption CONSUMPTION BY TYPE (IN QUADRILLION BTUS)

COAL 22.5

NATURAL GAS 23.8

PETROLEUM 37.1

NUCLEAR 8.5

RENEWABLE 7.3 SOURCE: EIA, 2009.


U.S. Primary Energy Consumption by Source and Sector, 2008 (Quadrillion Btu)

1) Does not include the fuel ethanol portion of motor gasoline—fuel ethanol is included in "Renewable Energy“; 2) Excludes supplemental gaseous fuels; 3) Includes less than 0.1 quadrillion Btu of coal coke net imports; 4) Conventional hydroelectric power, geothermal, solar/PV, wind, and biomass; 5) Includes industrial combined-heat-and-power (CHP) and industrial electricity-only plants; 6) Includes commercial combined-heat-and-power (CHP) and commercial electricity-only plants; 7) Electricity-only and combined-heat-and-power (CHP) plants whose primary business is to sell electricity, or electricity and heat, to the public. Note: Sum of components may not equal 100 percent due to independent rounding.Source: Energy Information Administration, Annual Energy Review 2008, Tables 1.3, 2.1b-2.1f , 10.3, and 10.4.

8


Foreign Dependency on Oil and Price Volatility

US consumes 25% of global oil but only produces 3%

58% of US oil consumption is imported from foreign countries

This number is expected to grow to 68% by 2025

Finite nature of fossil fuels renders US reluctant to deplete oil reserves

What is the long-term outlook of fossil fuels?

9US ENERGY TRENDS

Source: Energy Information Administration (EIA), Annual Energy Review 2007, June 2008.

Foreign dependency causes US to be extremely vulnerable to oil price volatility

US is affected by investment and production decisions by OPEC

OPEC’s willingness to cut supply to increase or maintain high prices of oil


Greenhouse Gas Emissions

10

Potential carbon reductions (in MtC/yr in 2030) based on the middle of the range of carbon conversions

Energy Type MtC/yr

Energy Efficiency 688

Concentrating Solar Power 63

Photovoltaics 63

Wind 181

Biofuels 58

Biomass 75

Geothermal 83

Source: ASES, 1/2007

MtC MegaTons Carbon

The United States accounts for only 4% of the world’s population and produces 25% of its greenhouse gases

Half of our country’s electricity is still produced by burning coal, a rich domestic resource but a major contributor to global warming

Carbon Emissions

Increased more than 15% between 1990 and 2006

Must be reduced by 60% by 2030 to effect global warming (Intergovernmental Panel on Climate Change)

Energy consumption is responsible for over 60% of CO2emitted into the atmosphere

Potential regulatory policies to address climate change are in various stages of development at the State, regional, and Federal levels

For electric power companies, policy changes could be made to limit or reduce GHG emissions


Less Energy Used in the US in 2008Americans used more solar, nuclear, biomass and wind energy in 2008 than 2007

The nation used less coal and petroleum during the same time frame and only slightly increased its natural gas consumption

Geothermal energy use remained the same

Est. U.S. energy use in 2008 equaled 99.2 quadrillion BTUs (“quads”), down from 101.5 quads in 2007

(A BTU or British Thermal Unit is a unit of measurement for energy, and is about 1.055 kilojoules)

The chart also shows the amount of energy rejected by the United States

Of the 99.2 quads consumed, only 42.15 ended up as energy services

Energy services are “things that make our lives better…the energy that makes your a move and the energy that comes out of a light bulb.” (Source: LLNL)

The ratio of energy services to the total amount of energy used is a measure of the country's energy efficiency. The remainder, is simply rejected. For example, some rejected energy shows up as waste heat from power plants. Once energy is rejected, it is no longer useful. But more efficient power plants, automobiles and even light bulbs really do reject less energy while providing the same energy services.

Source: Lawrence Livermore National Laboratory.

11


Energy use decreased in 2008 versus 2007

Source: Lawrence Livermore National Laboratory 2009. Data based on DOE numbers and does not include self‐generated electricity.

12


GREEN TECH TRENDS

13

The drivers that have propelled investment in the sustainable energy sector for the past five years, however, are still at work – climate

change, energy insecurity, fossil fuel depletion and new technologies. As well, political support remains strong, with an

estimated $180 billion of fiscal stimulus committed to sustainable energy.

UN Environmental Program, Global Trends in Sustainable

Energy Investment 2009

The drivers that have propelled investment in the sustainable energy sector for the past five years, however, are still at work – climate

change, energy insecurity, fossil fuel depletion and new technologies. As well, political support remains strong, with an

estimated $180 billion of fiscal stimulus committed to sustainable energy.

UN Environmental Program, Global Trends in Sustainable

Energy Investment 2009


Economy Trends & Green Tech

Despite global recession, global investment in the sustainable energy grew 5% in 2008

From $148 billion in 2007 to around $155 billion in 2008

Lower interest rates = lower cost of capital

Central banks lowering their interest rates has reduced the cost of financing for renewable energy projects

Limited financing available though due to credit crisis

Growth rate in demand for electricity slipped to 2.4% in 2008 from 2.7% growth in 2007

However, renewable energy’s share of the overall power generation market increased from 3.9% to 4.4%

Share prices of clean energy stocks fell almost 70%, more sharply than the overall stock market and has since only made up a fraction of the sell off in 2009

General flight from risk and growth sectors in late 2008

14

TRENDS

UNEP Sources: www.sefi.unep.org and www.unepfi.org


Policy Drives Increased Use of Renewable Energy

Strong growth in the use of renewable energy for electricity generation spurred by

Renewable fuel standard in the Energy Independence and Security Act of 2007 (EISA2007)

Renewable Portfolio Standard (RPS) programs at the State level

EISA2007

36 billion gallons of qualifying credits from biofuels to be produced by 2022 (from 4.7 billion gallons in 2007)

RPS Requirements

In the US, 30 states have developed and adopted renewable portfolio standards, which require a pre-determined amount of a state’s energy portfolio (up to 20%) to come exclusively from renewable sources by as early as 2010 (DOE)

15

Well-developed conditions for innovation, markets for clean energy through public procurement, energy efficiency standards and stable and simple policies are

essential to meet the climate change challenge (UNEP)

Well-developed conditions for innovation, markets for clean energy through public procurement, energy efficiency standards and stable and simple policies are

essential to meet the climate change challenge (UNEP)


The American Recovery and Reinvestment Act of 2009

The US has one of the largest and most clearly defined stimulus packages with $66 billionin funding available for sustainable energy, energy efficiency and transmission investments

Source: Recovery.gov

* Tax Relief - includes $15 B for Infrastructure and Science, $61 B for Protecting the Vulnerable, $25 B for Education and Training and $22 B for Energy, so total funds are $126 B for Infrastructure and Science, $142 B for Protecting the Vulnerable, $78 B for Education and Training, and $65 B for Energy

16


American Recovery and Reinvestment Act of 2009

$787bn stimulus package signed February 17, 2009 and includes about $90bn in energy-related funding to encourage development of green technology

$60bn of loan guarantees to offset costs

manufacturing renewable energy equipment;

developing renewable power projects; and

building electric transmission lines

30% investment tax credit available for companies that make equipment for renewable energy systems, energy storage equipment, smart grid, energy-efficient lighting, electric transmission and distribution and carbon capture and sequestration

Clean energy tax credits extended and "recession proofed" by offering choices in how investors take the credit

The ‘bonus’ 50% depreciation extended to the end of 2009 that allows developers to expense a major portion of the projects’ capital costs in the first year

17

TRENDS


Global Stimulus Spending Allocated to Renewable

$184.9 billion in stimulus money from 14 government entities allocated to renewable

NEF tallied up all of the spending stimuli from participating government entities and their allocations by renewable energy segment appear below

Source: New Energy Finance

Green Stimulus allocations to Sustainable Energy by Sector, April 2009, % share

18


Renewable Energy Sources Still Small Portion

7.3 quadrillion BTUs of renewable energy consumed in 2008 represents 7.4% of total energy (up from 6.8% in 2007)

Biomass and Hyrdro represent the overwhelming majority of % of renewable energy consumed in 2008

Solar and Wind are the fastest growing, but remain a small % of energy landscape

19

Source: Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels

Renewable Energy Consumption in the Nation’s Energy Supply, 2008


Competitive Pricing Helps Drive Use of Renewable Energy

Renewable energy technologies are becoming cheaper as they reach scale and operating experience

The overwhelming consensus is that wind is competitive with fossil fuels and by far the most commercially viable renewable energy source

Although the costs of developing and producing solar energy are falling, solar is still expensive (see next page)

Solar is beginning to be competitive in favorable scenarios

Grid proximity

Location (Southwestern US, California) with abundance of sunshine

Tax credits (Source: Lux Research and RenewableEnergyWorld.com)

According to the World Economic Forum (WEF)

Solar PV electricity costs may become comparable with daytime retail electricity prices in sunny areas within 12 to 36 months

20


Level-“ized” Energy Cost Comparison by $ per MegaWatt hour

US$/MWh

Clean Energy and Traditional Technologies –Range of Levelized Costs of Energy, December 2008, US$/MWh

Source: New Energy Finance, World Economic Forum, January 2009.

$0 $100 $200 $300 $400 $500 $600

Solar PV - Crystaline

Solar Thermal - Trough

Biomass - Municipal Solid Waste

Wind - Offshore

Wind - Onshore

Geothermal - Binary Plant

Geothermal - Flash Plant

Natural Gas OCGT

Coal Fired

n/aCellulosic and next gen biofuels

$241-299/MWhSolar thermal

$341-549/MWhSolar PV

Competitive with oil $45 per barrel

Sugar-based ethanol

$33-74/MWhGeothermal

Levelized CostEnergy

US$ over $100 per ton of CO2

Carbon Capture and Storage

$89-126/MWhOnshore wind

$158-205/MWhOffshore wind

Uneconomical, per World Economic Forum

Extremely uneconomical now, but should decrease in half by 2010

Note: Levelized Cost of Energy (LCOE) allows different energy generation technologies to be compared, taking into account their cost of production and generation efficiency. Figures indicate the required range of generation price for each clean energy technology to be competitive. Levelized costs exclude any subsidies.

21


Cost comparison analysis renewable energy sources

Coal is approx 5 cents per kilowatt-hour

Technology Typical CharacteristicsTypical Energy Costs

(U.S. cents/kilowatt-hour)

Power GenerationLarge hydro Plant size: 10 megawatts (MW) - 18,000 MW 3 - 4

Small hydro Plant size: 10 megawatts (MW) - 18,000 MW 4 - 7On-shore wind Turbine size: 1 - 3 MW

Blade diameter: 60-100 meters5 - 8

Off-shore wind Turbine size: 1.5 - 5 MWBlade diameter: 70-125 meters

8 - 12

Biomass power Plant size: 1 - 20 MW 5 - 12Geothermal power Plant size: 1 - 100 MW Type: binary, single- and

double-flash, natural steam4 - 7

Solar PV (module) Cell type and efficiency: single-crystal 17%; polycrystalline 15%; amorphous silicon 10%; thin film 9-12%

Rooftop solar PV Peak capacity: 2-5 kilowatts-peak 20 - 80Concentrating solar thermal power (CSP)

Plant size: 50-500 MW (trough), 10-20 MW (tower); Types: trough, tower, dish

12 - 18

Source: Ren21.net compiled from IEA and various sources.

22


Cost comparison analysis renewable energy sources

Price of a barrel of crude at $72.54 and national average of $2.62 per gallon of gas (Sep 2009)

One gallon = 3.7854118 liters, which is ~ 69 cents per liter

Technology Typical CharacteristicsTypical Energy Costs

(U.S. cents/kilowatt-hour)Hot Water/HeatingBiomass heat Plant size: 1-20 MW 1 - 6Solar hot water/heating Size: 2-5 m2 (household); 20-200 m2

(medium/multi-family); 0.5-2 MWth (large/district heating);Types: evacuated tube, flat-plate

2 - 20 household1 - 15 medium

1-8 large

Geothermal heating/cooling Plant capacity: 1-10 MW; Types: heat pumps, direct use, chillers

0.5 - 2

BiofuelsEthanol Feedstock: sugar cane, sugar beets, corn,

cassava, sorghum, wheat (and cellulose in the future)

25-30 cents/liter (sugar)40-50 cents/liter (corn)

gasoline equivalent

Biodiesel Feedstock: soy, rapeseed, mustard seed, palm, jatrapha, or waste vegetable oils

40-80 cents/liter(diesel equivalent)

Source: Ren21.net compiled from IEA and various sources.

23


Solar

Solar photovoltaics (PV) convert light into electricity using semiconductor materials

Remains less than 0.1% of US energy consumption

Disadvantages: High cost and inconsistency

Cost of silicon is decreasing, lowering costs of solar energy and driving demand from project developers and rooftop systems

Spot silicon prices have fallen from $332/kg in Oct 2008 to $136/kg in Mar 2009 (New Energy Finance)

While manufacturers’ margins are squeezed, the cost of generating solar power is cheaper

24


Solar

PV is expected to dramatically reduce costs through new technologies, increased manufacturing scale, a decrease in the price of silicon

PV is also expected to break into new areas of energy demand over the coming decadesPV is a gateway or distribution channel for storage, efficiency, smart grid metering and other enabling technologies

Diagram of a typical AC, battery-based system. Source: DOE.

Grid Connected PV SystemStand-Alone PV System (Off Grid)

Source: DOE.

25


Solar

Solar PV

Technology Gaps

Continued scale-up of entire crystalline silicon supply chain; process engineering to reduce costs

Mass manufacture of scalable, high-efficiency thin film on flexible substrates

Jump to next generation of super-efficient cells

Bottlenecks

Capital

Access to transmission grid

Refined silicon, formerly bottleneck about to go into oversupply

Solar Thermal

Tech Gaps and Bottlenecks

Proof of concept for most up-and-coming technologies

Availability of steam turbines

Links to transmission grid

Permitting

Source: New Energy Finance. A parabolic trough is the most widely deployed type of solar thermal power plant

26


WindIn 2008, wind projects generated 1.3% of U.S. electricity

Over 8,500 megawatts (MW) of new wind power capacity brought online, increasing the U.S. cumulative total by 50% to over 25,300 MW

WIND 27

Source: American Wind Energy Assoc 2009.

U.S. Wind Capacity Growth (1981-2008)

0

5,000

10,000

15,000

20,000

25,000

1981

-1983

1984

-1986

1987

-1989

1990

-1992

1993

-1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Cap

acity

MW

Net Capacity Additions Cumulative Capacity


Wind

U.S. on pace to generate 20% of the nation’s electricity by 2030 from wind energy (American Wind Energy Association)

Turbine pricing continues to decrease and the emergence of secondary turbine markets are enabling higher expected rates of return

Technology Gaps

Onshore

Power storage (to reduce impact of intermittency)

Existing technology adequate, drive train improvements required to increase reliability and decrease costs

Ever-larger turbines

Weakness of electricity grid

Offshore

Reliability of offshore turbines still a key concern

New dedicated marinized technology at larger scale being rolled out over next 5 years

Source: New Energy Finance.

28


BiofuelBiodiesel is renewable, nontoxic, and biodegradable

Produced from agricultural resources such as vegetable oils

Biofuels blend with gasoline or diesel to make them cleaner-burning to reduce emissions or used as a direct substitute

Food vs. Fuel

WEF estimates that biofuels can increase from current 1% to 5% of transport fuels without impacting food availability

BIOFUEL

Source: REN21, 2007

US Ethanol and Biodiesel Production, 2000-2007Global Biofuel Market Analysis

Global ethanol production will grow at a CAGR of 6.04% during 2009-2018 to reach 33,895 million gallons

29


Ethanol

The period 2004-2006 saw US investment in biofuels soar, with $9.2 billion pouring into the sector (World Economic Forum)

Most flowed into corn-based ethanolDisadvantage: corn is a food staple and feedstock around the world

Brazilian sugar cane-based ethanol is competitive with oil at $40 per barrel No shortage of land (deforestation) without jeopardizing food production

Source: DOE.30


Biomass and Waste to Energy

Biomass – Energy from plant and animal matter

Rural: agricultural waste, forest products waste, collected fuel wood and animal dung burned in furnaces to provide heat energy for cooking, heating and industrial processing

200+ producers of biomass power product in the US

More than two-thirds use forest products, and just under one-third use landfill gas as the primary fuel source

Modern biomass consists of new technologies such as biomass co-generation for power and heat, biomass gasification, biogas anaerobic digesters and liquid biofuels for vehicles

Waste-to-Energy Plants: similar to coal fired plants except use garbage instead of coal to create high pressure heat steam to generate electricity through a turbine

Disadvantages: Environmental cost

BIOMASS 31


Geothermal & HydroGeothermal is 0.3% of US energy consumption

Geothermal energy is produced by drilling into the earth and using steam or hot water to heat a building or generate electricity

Recent advances mean that geothermal energy can play an increasing role worldwide

New drilling techniques tap into resources previously too deep to access

New ways of extracting useful power from lower temperature geothermal fields allow productive use of resources that could not have been used economically in the past

Hydro, Ocean, and Tidal are 2.4% of US energy consumption

Hydro is power generated from water, primarily from large-scale dams

Accounts for approximately 20% of global energy production

Disadvantage: potential impact on wildlife and agriculture downstream from the dam

Tidal and wave power are being developed on a much smaller scale

Tidal power harnesses the energy of either currents created by the tides

Wave power is in a much earlier stage of development than the technology for harnessing tidal power

GEOTHERMAL 32


Enabling Technologies

33ENABLING TECHNOLOGIES

Enabling technologies influence the way energy is distributed, stored and consumed

These investment opportunities are critical to shifting to a low-carbon energy system

Four key enablers for a shift to clean energy are:

Energy efficiency

The cheapest way to reduce CO2 is to use less energy

Smart grids

Decentralized power supply that fluctuates with demand-side applications and software for energy management

Energy storage

Both hybrid cars and bulk storage for homes to balance short term grid fluctuations

Carbon capture and storage

Removing CO2 from processes that utilize fossil fuels for power or industrial applications, then trapping it in subsurface geological formations or using the gas for other purposes

Limited government incentives


Energy EfficiencyThe quickest way to reduce greenhouse emissions is to close the gap between energy demand and energy supply through energy efficiency

McKinsey Global Institute reported $170 billion in efficiency investments that could return and average of 17% IRR per year for investors

Policy is still needed to drive/change consumer and business behavior

Energy efficiency standards, regulations and incentives

Energy efficiency sectors of opportunity

Industrial sector (49%)

Residential (23%)

Transportation (15%)

Commercial (15%) - Source: World Economic Forum.

34


Smart Grid

35ENERGY EFFICIENCY

ENABLING EFFICIENCY SMART GRID STORAGE CARBON

The US electric grid - the power infrastructure - is overtaxed and rapidly running up against limitations

Smart (or Smarter) Grid

Comparable to the construction of the interstate highway system or the development of the Internet

Why? Reliability (period)

The Northeast blackout of 2003 resulted in a $6 billion economic loss to the region (DOE)

Smart Grid Technology Focuses On…

Ensuring reliability to degrees never before possible

Maintaining affordability

Reinforcing US global competitiveness

Fully accommodating renewable and traditional energy sources

Potentially reducing our carbon footprint


Smart Grid

It’s all about integrationIntegrating a variety of technologies aimed to optimize energy supply and demand

Modern Grid: A System of Integrated Technologies

There are no “silver bullets”; the very act of looking for them costs money

The answer is a “silver buckshot” (DOE)

Analysis showed that significant modernization results from smartly integrating suites of technology that deliver the principal characteristics, which improve grid performance

Sensing and Measurement

Advanced Control Methods

Improved Interfaces & Decision Support

Advanced Components IC = Integrated Communication

IC

IC IC

Source: (National Energy Technology Laboratory)

36


Energy Storage

37ENERGY EFFICIENCY

ENABLING EFFICIENCY SMART GRID STORAGE CARBON

Batteries and energy storage technologies become key enablers

Intermittent reality of many renewable energy and emerging energy technologies

Policy: Electric Drive Battery and Component Manufacturing Initiative

As of July 2009, more than 100 companies applied

$2.4 billion set to be divided into 32 to 35 grants in seven different categories

The cost of storing 1MWh of electricity ranges from $50 to $180

Though energy storage is currently expensive, it can increasingly be used to smooth the supply of power or to bridge the gap between peak and night-time electricity rates

Batteries & Flywheels

Plug-in hybrids (PHEVs) will most likely use lithium ion batteries

Sodium sulfur batteries implemented for peak power load leveling and storage of intermittent wind energy

Flywheels are being explored as an option for high power density applications, such as balancing short-term grid fluctuations


GREEN TECH M&A ENVIRONMENT

38MERGERS AND ACQUISITIONS


Global M&A Trends

According to New Energy Finance, Global M&A dropped 16% in 2008

The $21.7 billion in M&A in 2008 is significantly down from $25.9 billion in 2007

Clean tech M&A was curbed by global credit crisis (access to acquisition capital limited)

The majority of change of control transactions were asset acquisitions or refinancing transactions

A decrease in VCs exiting into the public markets (low valuations)

Slight increase in private equity buy-outs in 2008 as well


Acquisition transactions by type, 2002-2008, $ billions

Peachtree Media Advisors, Inc. is currently building its internal transactions database for its Green Tech M&A Round Up 2009 Report focusing on U.S. transactions only

39


Global M&A Trends

Wind experienced the lion’s share of the volume of M&A transactions in 2008

Consolidation swept through Europe’s wind market (UNEP)

In 2008, the 42 transactions in the wind sector represented 38% growth over 2007

Solar had 11 transactions globally, representing a 29% increase over the previous year

Biofuel transaction volume decreased by 38% to five transaction in 2008

Acquisition transactions by technology, 2008, and growth on 2007, $ billions

Note: Total values include estimates for undisclosed deals

Source: New Energy Finance, UNEP SEFI

E-mail [email protected] to receive the 2009 Green Tech M&A Round Up Report in January 2010

Manufacturing and technology supply chain acquisitions

In 2008, 29.5% of all renewable energy deals were for such assets – up from11% in 2007 (source New Energy Finance)

Companies seeking to secure an end-to-end supply chain footprint

40


Global M&A Trends

Solar was the only sector to see an increase in M&A spending

Solar increased 60% from $4 billion in 2007 to $6.4 billion in 2008

Biofuels had the largest decrease

Biofuels decreased 27% from $2.6 billion in 2007 to $1.9 billion in 2008

Equipment manufacturing had the largest level of M&A activity ($9.4 billion)

Deals targeting developers saw the largest increase ($7.3 billion in 2008 and increase of 156% over 2007)


Global Acquisition transactions by sector. 2002-2008, $ billions

M&A activity is likely to increase as well-capitalized players take advantage of lower energy company valuations and some distressed opportunities

Factors the will drive M&A are increasing valuations, an improving economy (demand for energy) and a the continuation of favorable renewable energy policies

41


Venture Capital & Private Equity

VC/PE invested $19.3 billion in renewable energy and energy efficiency companies in 2008, an increase of 43% compared with 2007

The majority of global transactions in the renewable sector were PE expansion capital investments

Globally, more than 500 funding rounds too place during 2008

VCs were more active in the second and third quarters of 2008 with a sharp decline in Q4 2008

AVA Solar $104m Series B round led by DCM Venture Capital

Early-stage investment in biofuels was focused on firms exploring ground-breaking technologies

Note: Buy-outs are not included as new investment. Total values include estimates for undisclosed deals.

Source: New Energy Finance, UNEP, SEFI.

Global VC/PE new investment by stage, 2002 -2008, $ billions

42



Leading sustainable energy sectors

Wind attracted the highest amount of new investment $52 billion

The most mature and best –established sustainable energy generation technology

Solar received $34 billion of new investment, up 49% over 2007

Biofuels received $17 billion of new investment, down 9% from 2007

Note: New investment volume adjusts for re-invested equity. Total values include estimates for undisclosed deals

Financial new investment by technology, 2008, and growth on 2007, $ billions

Source: New Energy Finance, UNEP SEFI

43


Total Transaction Value

In 2008, total global transaction value in the renewable energy sector was $155 billion, representing a 5% increase over 2007, according to NEF and UNEP

The increase in total transaction value of 5% was well below the 59% increase in 2007 over 2006

S/RP = small/residential projects. New investment volume adjusts for re-invested equity. Total values include estimates for undisclosed deals


New Investment in Sustainable Energy, 2002-2008$ billion

NEF Source: www.newenergyfinance.com

UNEP Source: www.unepfi.org

44


U.S. Green Tech M&A Trends


2008 M&A Activity

TYPES OF ALTERNATIVE ENERGY 46

Greentech transaction volume was resilient in first half of 2008 amidst a credit crisis and economic downturn

Drop off after Sep 2008

In 2008, Solar and Biofuel were the two largest segments

More than half of total combined deal volume in the sector (55%)

Solar power and biofuel producers require more capital to build production facilities

These two segments secured twelve raises exceeding $100 million in 2008

2008 Greentech M&A Transaction Volume (#) and Value ($mil)

Segment Transactions ValueSolar 89 $3,461Biofuel 69 2,016Biomass 8 255Hydro, Ocean Tidal 4 1,915Geothermal 8 167Wind 21 777Diversified Renewables 13 164Smart Distribution 11 274Energy Storage 16 291Energy Efficiency 43 507Carbon Capture and Sequestration 4 27Hydrogen and Fuel Cell 6 78Total 292 $9,932

Source: Peachtree Media Advisors, Inc.


2009 M&A Activity

TYPES OF ALTERNATIVE ENERGY 47

In the first seven months of 2009, 101 transactions were completed for a reported $2.29 billon in deal value versus 171 transactions and $4.90 billion for the same period in 2008

Deal volume declined 40.9% and deal value declined 53.3% in the 1st seven months of 2009 vs 2008

Average deal size decreased as well in this same period comparison

Transaction Volume by Segment in First Seven Months1st 7 mo. 1st 7 mo.

Segment 2009 2008Solar 29 51Biofuel 19 48Biomass 5 5Hydro, Ocean Tidal 2 1Geothermal 0 3Wind 7 14Diversified Renewables 2 5Smart Distribution 6 6Energy Storage 7 8Energy Efficiency 21 25Carbon Capture and Sequestration 1 2Hydrogen and Fuel Cell 2 3Total 101 171


Transaction Value by Segment in First Seven Months ($mil)

Segment 2009 2008Solar $877 $1,909Biofuel 644 1,598Biomass 57 33Hydro, Ocean Tidal 22 3Geothermal 0 94Wind 41 655Diversified Renewables 7 43Smart Distribution 94 73Energy Storage 252 124Energy Efficiency 223 330Carbon Capture and Sequestration 50 14Hydrogen and Fuel Cell 21 27Total $2,288 $4,904




48MERGERS AND ACQUISITIONS

VCs less willing to take risks on early-stage pre-profitable businesses

Significantly longer time to get to commercialization, if at all

The impact of the Recession ‘08 on clean tech – people less receptive to new technologies during a downturn

VCs (and nearly everyone else) retrenched to positions where they felt more comfortable

VCs moved down the value chain to later-stage investment opportunities

Lower valuations and a down M&A market limited exit opportunities

Without a clear exit strategy (healthy buyers), VCs are hesitant to fund start ups

Large UK investors APAX and 3i recently announced that they were abandoning early-stage investments


Public Market Company Valuations


Greentech Public Market Values

PUBLIC MARKET VALUES 50

Sources: CapitalIQ; Company SEC Filings. Stock Price 7-29-09.

Comparable Public Company Multiples ($ millions, except multiples)

Company Market Cap Total Debt Cash EVLTM

RevenueLTM

EBITDARev

MulitpleEBITDA Multiple

SOLAR

Akeena Solar, Inc. 38 1 3 36 36 (22) 1.0x n/a

EMCORE Corporation 107 16 15 108 246 (42) 0.4x n/a

Energy Conversion Devices, Inc. 730 316 423 624 351 77 1.8x 8.1x

Evergreen Solar Inc. 381 314 57 639 145 (39) 4.4x n/a

First Solar, Inc. 16,355 228 625 15,958 1,468 626 10.9x 25.5x

GT Solar International, Inc. 1,039 0 94 945 535 170 1.8x 5.6x

Premier Power Renewable Energy, Inc. 98 0 3 95 44 (0) 2.1x n/a

SunPower Corporation 2,672 468 149 2,990 1,375 242 2.2x 12.3x

Suntech Power Holdings Co. Ltd. 2,561 1,717 508 3,770 1,924 224 2.0x 16.8x

MEAN 3.0x 13.7x

BIOFUEL

Bluefire Ethanol Fuels, Inc. 39 0 2 38 1 (13) 33.3x n/a

Green Plains Renewable Energy, Inc. 110 337 54 393 473 4 0.8x 99.5x

Verenium Corporation 59 126 16 169 69 (65) 2.5x n/a

MEAN 12.2x 99.5x

WIND

Broadwind Energy, Inc. 883 41 6 918 235 (1) 3.9x n/a

MEAN 3.9x -




51



RevenueLTM

EBITDARev


BIOMASS

Covanta Holding Corporation 2,371 1,982 159 4,193 1,634 504 2.6x 8.3x

MEAN 2.6x 8.3x

GEOTHERMAL

LSB Industries Inc. 331 102 52 381 739 69 0.5x 5.5x

Ormat Technologies Inc. 1,737 465 43 2,159 375 132 5.8x 16.3x

WaterFurnace Renewable Energy, Inc. 255 0 6 249 138 24 1.8x 10.4x

MEAN 2.7x 10.7x

EFFICIENCY

AeroVironment, Inc. 595 0 102 494 236 38 2.1x 13.1x

Composite Technology Corporation 76 8 3 81 62 (35) 1.3x n/a

Comverge, Inc. 225 30 28 227 78 (12) 2.9x n/a

Echelon Corporation 298 26 29 296 117 (24) 2.5x n/a

EnerNOC, Inc. 487 5 54 437 106 (29) 4.1x n/a

Lime Energy Co. 52 8 9 51 69 (7) 0.7x n/a

Orion Energy Systems, Inc 79 4 36 47 73 2 0.6x 27.1x

PowerSecure International, Inc. 78 6 23 61 122 10 0.5x 6.2x

MEAN 1.9x 15.5x

HYDRO, OCEAN & TIDAL

Ocean Power Technologies, Inc 71 0 8 63 5 (20) 14.0x n/a

MEAN 14.0x -



PUBLIC MARKET VALUES




RevenueLTM

EBITDARev


ENERGY STORAGE

Advanced Battery Technologies Inc. 215 0 34 182 46 19 4.0x 9.6x

Axion Power International Inc. 38 0 3 34 1 (8) 43.4x n/a

Ener1, Inc. 758 27 4 781 15 (35) 52.2x n/a

EnerSys 929 436 105 1,260 2,162 215 0.6x 5.8x

Kinder Morgan Management LLC 3,674 0 - 3,674 NA NA n/a n/a

Polypore International Inc. 466 793 96 1,163 574 148 2.0x 7.8x

Ultralife Corp. 123 22 1 144 245 19 0.6x 7.5x

Valence Technology Inc. 268 54 8 313 29 (15) 10.7x n/a

MEAN 16.2x 7.7x

WASTE MANAGEMENT

American Ecology Corp. 349 0 24 325 165 41 2.0x 8.0x

Casella Waste Systems Inc. 64 582 3 643 576 121 1.1x 5.3x

Waste Management, Inc. 13,574 8,789 947 21,416 12,932 3,390 1.7x 6.3x

MEAN 1.6x 6.5x

DIVERSIFIED RENEWABLE

Energy Composites Corporation 189 7 3 194 10 (1) 19.6x n/a

GreenHunter Energy, Inc. 20 71 1 90 8 (31) 11.3x n/a

Satcon Technology Corporation 107 6 7 106 66 (13) 1.6x n/a

MEAN 10.8x -

6.6x 15.3x

2.1x 8.2x

OVERALL RENEWABLE MEAN

OVERALL RENEWABLE MEDIAN



PUBLIC MARKET VALUES




RevenueLTM

EBITDARev


DIVERSIFIED ENERGY

Avista Corp. 859 1,166 36 1,990 1,668 286 1.2x 7.0x

Calpine Corp. 5,467 10,475 1,626 14,316 9,663 1,804 1.5x 7.9x

Chevron Corp. 131,927 12,194 9,150 134,971 225,440 43,543 0.6x 3.1x

ConocoPhillips 67,574 29,379 802 96,151 202,079 35,355 0.5x 2.7x

Exelon Corp. 31,548 13,164 2,149 42,563 19,064 7,043 2.2x 6.0x

IdaCorp, Inc. 1,086 1,512 89 2,508 976 305 2.6x 8.2x

Integrys Energy Group, Inc. 2,075 2,941 332 4,684 13,259 473 0.4x 9.9x

PNM Resources Inc. 804 1,715 70 2,448 1,981 248 1.2x 9.9x

Progress Energy Inc. 9,847 12,365 632 21,580 9,543 2,797 2.3x 7.7x

Rentech, Inc. 100 106 63 143 202 (16) 0.7x n/a

Sunoco Inc. 3,557 2,513 206 5,864 45,230 2,155 0.1x 2.7x

The AES Corporation 6,340 17,957 1,267 23,030 15,367 4,169 1.5x 5.5x

Valero Energy Corp. 11,552 7,576 1,715 17,413 104,167 5,411 0.2x 3.2x

Wisconsin Energy Corp. 4,428 4,887 17 9,297 4,396 1,078 2.1x 8.6x

Xcel Energy Inc. 7,810 8,564 301 16,072 10,870 2,385 1.5x 6.7x

Syntroleum Corp. 168 0 17 151 24 5 6.4x 33.2x

MEAN 1.6x 8.2x

5.1x 12.2x

2.0x 7.9x

OVERALL MEAN

OVERALL MEDIAN


The WilderHill New Energy Global Innovation Index (NEX)

NEX is a benchmark index of 88 clean energy stocks

In late 2008, the index dropped 291 points or 68.8% in the six month period between Jul 2008 and Dec 2008

The index has since recovered and appears to have an upward trajectory

54


WHYPEACHTREE?

55


Why Peachtree Media Advisors?

Extensive knowledgebase of companies in the clean energy sector

More than 20 closed transactions

Specialization in the rapidly growing clean tech and Interactive media sectors

Personal relationships with digital media, tech and green tech investors

A growing global network of investor contacts (U.S., Brazil, China, Australia and the UK)

Extensive tracking of all strategic buyers, investors and transactions in clean tech sector

Combining investment banking expertise with Department of Energy Grant writing

Substantially better service and lower fees than competitionExpert M&A Advisory practice for smaller and mid-size technology companies

Financial advisory services for green tech – project finance, debt, lease financing, partnerships, venture capital and Department of Energy grant writing

Competition is unwilling to navigate outside of comfort zone

A growing team with a solid reputation in new media, technology and now green tech

A small investment bank with a global network


THE PEACHTREEM&A SALE PROCESS

57


Peachtree Transaction Process

Information memorandum

Marketing/expressions of interest

Management presentations

Due diligence/letter of intent

Final negotiations/close

Five primary phases

(4 to 6 month process)


Information memorandum – Month 1Initial information request

Develop strategic positioning

Most compelling investment merits

Highlight buyer interests

Create information memorandum

Exec Summary

Investment Merits

Market Served

Products & Services

Operations

Growth Opportunities

Finance

Management & Organization

Buyer target list


Marketing/expressions of interest – Months 2 and 3Initial contact with senior level decision makers

Non-disclosure agreement

Dissemination of information memorandum

Process letter requesting non-binding expression of interest

Terms

Initial valuation

Preliminary deal structure

Source of capital

Review bids


Management presentations – Month 4Select/invite prospects to go to the next round

Management presentation

An informative presentation given by management to select bidders

Q&A session

Discussion of process and next steps

Second round process letter sent to management presentation attendees

Request for Letter of Intent (LOI)

Terms of deal structure

Indicate initial terms of purchase and sale agreement

Bidder proposed capital structure


Due Diligence – Month 5Due diligence

Continued discussion with management via conference call

Extensive review of data room, legal documents, agreements and operating contracts


Letter of Intent/Final Negotiation/Closing – Month 6Review of LOIs

Comparison of final bids

Final negotiations with top bidders

Choosing the final bidder

Confirmatory due diligence

Closing


About John Doyle

In 2000, Mr. Doyle successfully launched a digital production company in Los Angeles, CA, developing both online and offline digital content. In 2001, the company transitioned to focusing solely on raising money for offline film and television projects. Mr. Doyle has worked with Conde Nast, Fox Cable Networks, 20th Century Fox, Writers & Artists Agency and Revolution Studios.

In 2004, Mr. Doyle returned to media investment banking with The Jordan, Edmiston Group, Inc. His primary responsibilities included developing qualitative and quantitative analytical materials at each phase of the M&A transaction process. Highly experienced in valuing, analyzing and positioning media businesses, Mr. Doyle was responsible for closing more than ten media M&A transactions.

Peachtree Media Advisors, Inc. was established to serve the merger and acquisition advisory needs of the interactive marketing, digital consumer and out-of-home sectors of media. With a substantial amount of media operations and investment banking experience, Mr. Doyle is able to deliver expert advice in valuing new media assets, positioning companies during the sale process, developing information memoranda to send to potential buyers or investors, coaching management through presentations, developing bids/deal structure analysis and managing the due diligence process to closing.

Established by John Doyle, Peachtree Media Advisors, Inc. serves the interactive marketing, digital and out-of-home sectors of media. Mr. Doyle has more than twelve years of media investment banking experience, having worked as a senior level investment banker at Veronis Suhler Stevenson and JEGI. After graduating from Dartmouth College In 1995 with a double major of Engineering and Economics, Mr. Doyle specialized in the business information services and specialty media and marketing services at Veronis Suhler Stevenson (VSS). While at VSS, Mr. Doyle performed M&A advisory services to sell-side and buy-side clients, in addition to developing platform acquisition strategies, performing leveraged buy out analysis and conducting due diligence for the VSS private equity funds.


50 Vanderbilt Ave., #30

New York, NY 10017

T: (212) 570-1009

F: (646) 607-1786

www.PeachtreeGreenAdvisors.com

▪[email protected]

Peachtree Green AdvisorsA Division of Peachtree Media Advisors, Inc.

August 2009

About Peachtree Green Advisors2009

Economy & Finance

Transcript of About Peachtree Green Advisors2009