Archive for the ‘Private Equity’ Category

Boeing: Green Technology with Solar-Powered Aircraft

Boeing recently signed an $89 million deal with the U.S. Defense Advanced Research Projects Agency to develop an unmanned solar-powered aircraft. The aircraft, dubbed, The Solar Eagle, will have its first flight in 2014. “SolarEagle is a uniquely configured, large unmanned aircraft designed to eventually remain on station at stratospheric altitudes for at least five years,” said Pat O’Neil, Boeing Phantom Works program manager for Vulture II. “That’s a daunting task, but Boeing has a highly reliable solar-electric design that will meet the challenge in order to perform persistent communications, intelligence, surveillance and reconnaissance missions from altitudes above 60,000 feet.” Boeing will launch two new prototypes next year, a stealth combat aircraft and a hydrogen-powered high-altitude aircraft.

“Vampire Power”

iGO, the company behind eco-friendly universal chargers and power management solutions, has been awarded United States Patent relating to its novel approach to reducing wasted standby power, commonly referred to as “vampire power.” This represents the second patent received on iGo Green Technology(TM), which allows consumers and businesses to automatically reduce vampire power by up to 85%. “We are very pleased to continue building our portfolio of intellectual property relating to iGo Green Technology and strengthen our competitive advantage in the category of eco-friendly power management solutions,” said Michael D. Heil, president and chief executive officer of iGo. iGo Green Technology is currently featured in iGo’s smart, energy-efficient Laptop Wall Charger, which automatically detects when a laptop is not in use and shuts off power drawn from the wall, automatically eliminating wasted vampire power by up to 85%. This first-ever green laptop charger is compatible with the most popular laptops on the market and also allows users to charge two devices from one charger at the same time by using its integrated USB charging port. Travel friendly, the laptop charger works worldwide without the need for a separate voltage converter. The iGo Green Technology line, including the iGo Green Laptop Chargers and Power Smart Towers, could have saved U.S. consumers more than $300 million last year by reducing vampire power. To learn more about energy-efficient iGo Green Technology products, please visit www.iGo.com.

Report: U.S. Green Building Market Will Reach $173.5 Billion by 2015

According to the most recent report by EL Insights, the U.S. green building market value will balloon from $71.1 billion now to $173 billion by 2015. Of that, commercial green building is expected to grow by 18.1% annually during the same time period from $35.6 billion to $81.8 billion. This explosive projected growth is attributed both to a growing recognition of the potential cost-savings as well as incentives from the government. Green building renovation also comprises a significant portion of future green building. The growth in green building will lead to a number of changes in the broader building market, according to EL Insights: Construction workers will increasingly seek out green training programs, companies will spend more cash on green building technology, and homes touting green building features will do better on the real estate market. All of this will result in cost savings for building and home owners, who will reap the benefits of lower energy and heating bill. The U.S. Green Building Council, offers virtually endless amounts of information on green building studies and LEED certification.

The Global Market For Green Building Materials Market to Reach $406 Billion by 2015

The world market for green building materials is expected to reach $406 billion by the year 2015. This growth will be fueled primarily by increased awareness of environmental concerns worldwide, high-energy costs, awareness of well-being and productivity benefits of green buildings, and decreasing costs of green building materials. The green building concept is set to become a global phenomenon, transforming from a niche arena to a mainstream concept. Green buildings are transforming the construction industry landscape, including both residential and commercial sectors. Owing to increased awareness of environmental concerns the world over, government mandates and voluntary standards are driving the growth of green buildings, and in parallel the demand for green building materials. Green floorings represent the largest and fastest growing green building materials in the US, followed by green concrete and green roofs. Green floor coverings are eco-friendly green building products that are made from a variety of materials, such as cork, carpet, bamboo, linoleum, ceramic tile, and hardwood. In addition, the practice of planted green roofs, is gaining momentum in several cities in the US. In terms of end-use markets, residential sector constitutes the largest market for green building materials, while non-residential sector represents the fastest growing market.

For more details about this comprehensive market research report, please visit –
http://www.strategyr.com/Green_Building_Materials_Market_Report.asp

Tony Blair Joins CA Based Green Technology VC

Khosla Ventures, the Menlo Park, Calif., firm founded by Vinod Khosla in 2004, stated Tony Blair will advise their portfolio companies on public policy. Khosla is currently investing $1.1 billion in tech firms, including so-called clean technology. Blair currently leads the “Breaking the Climate Deadlock” effort, which aims to build consensus on international climate policy. Blair stated that technology might help solve the “twin challenges” of energy security and climate change. “Solving the climate crisis is more than just a political agenda item. It’s an urgent priority that requires innovation, creativity and ambition,” Blair noted. “I share a clear vision with Vinod, one of the earliest leaders in clean-tech investment, that entrepreneurs in Silicon Valley and beyond will have a tremendous impact on our environmental future.” One of Khosla Ventures portfolio companies uses carbon emissions to make cement products. Even as other venture capitalists have scaled back, due to high costs and unproven technologies, Khosla has continued to invest in the sector.  Overall, the total venture capital invested in clean technology companies fell to $2.3 billion in 2009, down from $4.1 billion in 2008, according to the National Venture Capital Assn.

How the US Falls Short in RE

The US has a number of clean energy companies, the only problem is they focus their efforts overseas, taking with them jobs, investment, and renewable energy opportunities here at home. Foreign government policies in countries like China and France are driving this migration of clean energy companies and skilled labor overseas. The US’s competitive position is at risk in the emerging global clean and renewable energy economy. According to Bloomberg new Energy Finance, global renewable energy investment is expected to reach $200 billion by the end of 2010, representing a 25% increase over 2009. In 2009, China overtook the United States in renewable energy investments due to a relentless push in solar, clean water, and especially wind technology. Of the G20 Nations, the US ranks 11th in terms of percentage of GDP invested in clean energy products.

Going Green: Mutual Funds

Going green is not only great for the environment and eco-friendly but investing in green has also become good business. But what is the safest way for investors to get into the green market? In the article “Going Green With Mutual Funds” written by Mark Veverka he suggests that the best way to invest in green companies is through actively managed green mutual funds. Single-sector funds tend to be volatile, much like the industries they track. The green industry is influenced primarily by government policies, subsidies and regulations which can change rapidly and impact markets, according to John Segrich of Gabelli SRI Green Mutual Fund (MUTF: SRIAX). Segrich’s green mutual fund launched in 2007 and was the best performer in its category in 2009.

Read more: http://www.smartmoney.com/Investing/Mutual-Funds/Going-Green-With-Mutual-Funds/

Green Office Buildings Demand 2% Higher Rents, 16% Higher Property Values.

In a working paper by noted economist and professor of public policy at the University of California, Berkley, John M. Quigley shows that historically, rents for green offices have been shown to demand a nearly 2% rental premium over comparable buildings. These premiums, Quigley argues, are related to the building’s energy-saving characteristics. His results indicate the importance of obtaining a green label and its subsequent effects on market rent and overall values of commercial units. Quigley’s results suggest that if given two otherwise identical commercial buildings, the building with an Energy-Star certification will rent for about three percent more per square foot, and when cap rates are taken into account, the difference in effective rent is nearly double. In addition to higher rents, his findings suggest that the selling price for the Energy-star certified building may be as much as 16 percent over the non Energy-star rated property. From a non label standpoint, Quigley’s study shows that a 10 percent decrease in energy consumption results in a value increase of roughly 1 percent, and that’s above the premium demanded by the green labeling  alone. His research shows that the private market does in fact incorporate, whether at the owner or tenant level, energy efficiency, certification, and green practices, into rents and asset values.  

Source: Doing Well By Doing Good? Green Office Buildings.By Piet Eichholtz, Nils Kok, and John M. Quigley, August 2009.

Grubb & Ellis Releases 2010 Commercial Real Estate Forecast

Grubb & Ellis Company, one of the largest commercial real estate services and investment companies, released its 2010 Real Estate Forecast, expecting the recovery of commercial real estate to begin in 2011.  “The national economy has begun a slow and cautious recovery, but the labor market, which often lags the broader economy, will turn around only gradually with sustained improvement unlikely before the second half of 2010. Because commercial real estate lags the labor market, it still has a ways to go before reaching its own low point,” said Bob Bach, senior vice president, chief economist of Grubb & Ellis.
Grubb & Ellis expects the four core property types of commercial real estate to recover in the following order; Multifamily Housing, Industrial, Retail and Office, concluding that the “free fall we saw in 2009 is over, and the future is more certain, giving owners and users of real estate the confidence to begin making decisions again,” said Bach.  California, especially Los Angeles is expected to lead the market due to its constant growth and appeal for employment. 

Source: Grubb & Ellis Company

Related Links: http://www.grubb-ellis.com/forecast2010/

Earn-Outs Can Help Reach Middle Ground on Price Value

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There’s an interesting article published recently about “earn-outs,” by merger-and-acquisition guru Scott Lochner.

What’s an Earn-Out?
According to Lochner, “If there is disagreement about the business value of a company whose assets or shares of stock are being potentially purchased and sold in an M&A transaction, it is common to include an “earn-out” provision as a portion of the purchase consideration.”

An “earn-out” is basically a payment for work and performance after a deal is closed. For example, if a seller believes the value of a company is $55 million or more and the buyer thinks it’s worth only $50 million, than the gap in purchase consideration is five million dollars.
That $5 million gap can be closed with an “earn-out,” or a contract that allows the seller to earn up to that $55 million or more if the business sold performs on an agreed target (financial or non-financial) over an agreed amount of time. (more…)