Target Information

Also Energy Holdings, Inc. (AlsoEnergy) is a prominent provider of solar energy solutions, specializing in software, hardware, and support services for a diverse range of markets, including residential, commercial & industrial, and utility-scale solar installations. Founded with a vision to enhance the effectiveness and reach of solar energy technology, AlsoEnergy has quickly established itself as a leader in its field since Clairvest Group Inc. first invested in the company four years ago.

The company has seen significant growth and innovation under Clairvest's stewardship, developing a comprehensive platform that integrates advanced technologies to streamline solar project management and optimize performance. This strategic focus on innovation has strengthened AlsoEnergy’s position within an increasingly competitive market.

Industry Overview

The solar energy industry in the United States has been experiencing rapid growth, fueled by increasing demand for sustainable energy solutions and favorable government policies. As of early 2022, the sector has benefitted from significant investments and advancements in technology, which have lowered costs and enhanced efficiency. This has resulted in a broader adoption of solar power across various sectors, including residential, commercial, and utility-scale projects.

Moreover, the Biden administration's commitment to expanding renewable energy sources aims to achieve a carbon-free power sector by 2035, which is expected to further stimulate industry growth. Financial incentives, such as investment tax credits (ITC), continue to encourage both residential and commercial consumers to invest in solar energy, bolstering market expansion.

Despite the positive ascent, the industry faces challenges, including supply chain disruptions and fluctuating material costs. However, companies like AlsoEnergy that provide integrated solutions are particularly well-positioned to navigate these challenges and capitalize on emerging opportunities. The competitive landscape remains dynamic, with numerous players vying for market share, making strategic partnerships and technological innovation crucial for sustained growth.

As the industry matures, the emphasis on scalable and efficient software solutions to manage solar assets is becoming essential. AlsoEnergy’s focus on advancing its technology stack positions it as a key participant in this evolving landscape, which prioritizes performance optimization and data-driven decision-making.

Rationale Behind the Deal

The recent acquisition of AlsoEnergy by Stem, Inc. represents a strategic move to enhance Stem’s portfolio in the solar market. By integrating AlsoEnergy’s robust software and support services, Stem aims to strengthen its capabilities in providing comprehensive energy management solutions. This alignment of services is anticipated to yield synergies that drive operational efficiencies and amplify growth potential.

Clairvest's decision to monetize its investment through this sale underscores the company's success in cultivating a high-value asset. The sale proceeds of approximately US$350 million, which include a significant cash component, enable Clairvest to capitalize on its investment while continuing to fund new ventures and opportunities in the energy sector.

Investor Information

Clairvest Group Inc. (TSX: CVG) is a prominent private equity firm specializing in investing in growth-oriented companies across various sectors, including energy. With a strategic investment approach and a dedicated management team, Clairvest has a proven track record of fostering businesses to optimize their market positions and operational effectiveness.

Clairvest Equity Partners V (CEP V) represents a significant fund within Clairvest’s portfolio, targeting investments in innovative and scalable businesses. The firm's expertise in nurturing entrepreneurial ventures has enabled it to play a pivotal role in the development of AlsoEnergy’s capabilities, culminating in the successful exit through this sale to Stem, Inc.

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From an investment standpoint, Clairvest’s sale of AlsoEnergy to Stem, Inc. appears to be a commendable strategic move. The combination of cash and equity in Stem allows Clairvest to secure immediate liquidity while retaining exposure to future growth in the solar sector through Stem’s innovative platform. This dual benefit is indicative of a well-structured deal that maximizes value for Clairvest.

Moreover, the timing of the sale aligns with the robust growth prospects of the solar energy market in the United States. As regulatory support for renewable energy intensifies, companies like Stem that integrate technology and energy management are poised for substantial expansion. This further solidifies Clairvest's position as a forward-thinking investor capable of successfully navigating market dynamics.

Additionally, Clairvest’s ability to exit at a significant profit – resulting in a positive impact on its book value per share – underscores the effectiveness of its investment strategy and the operational excellence fostered in AlsoEnergy. Given these factors, this deal stands out as a testament to Clairvest's capability in identifying and nurturing high-potential investments.

In conclusion, the acquisition presents a strategic advantage for Stem while providing Clairvest with a fruitful exit. The anticipated growth trajectory within the solar market enhances the overall value realized by Clairvest, making this transaction a promising outcome for all stakeholders involved.

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