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Is Cleantech’s IPO Window Opening?

By Jason Morris, Executive VP, Schwartz MSL

The Cleantech market has been littered with companies who have filed S-1s only to put any thoughts of testing the public markets on hold. But could the Cleantech IPO window finally be opening?

As Katie Fehrenbacher at Earth2Tech posted recently, solar power plant builder BrightSource Energy Designs and Enerkem Inc., a Canadian developer of renewable bio-fuels and chemicals, have priced shares with the intention of beginning trading in the near future. Enphase Energy, Inc., which provides micro-invertors for solar panels, just went public and raised $51.1 million. One is a fluke, two a coincidence and three a trend? Let’s hope.

It is no secret that venture capitalists and investment banks are of a like mind when it comes to the narrowness of IPO windows. It isn’t uncommon for the investment community to all rally around a suspected window and pull the trigger on public offerings.

What has likely been tough for the aforementioned companies and other 2010 or 2011 filers like Silver Spring, is that an elongated period between S-1 filing and first trade likely means they have been operating at a significant disadvantage as it relates to public relations. Most companies work to establish a steady drumbeat of communications heading into the quiet period so that they can continue with communications around normal business activities post filing. Some, however, don’t understand the need to build out their communications infrastructure and plan first, and may handycap their sales and business development teams for long periods of time.

It will be interesting to watch Enphase, Enerkem and BrightSource as they start trading, and see if it opens the door for any others to file and follow. Although they all fall in the broad cleantech bucket, the companies could really not be any more different in terms of technology and business model.

What They Do

Enerkem is a pre-revenue company that is working off of the “storied IPO’ approach that is now popular with players in the biofuels and biomass industry. The idea is that you prove your technology at pilot scale and rather than try and raise hundreds of millions of dollars in private financing, you leverage a few strategic investors and an IPO to finance the capex-heavy buildout of operations.

Enphase is a commercially succcessful microinverter company targeting the residential and small commercial solar market. The company makes a high-value product that helps boost power from solar systems that might otherwise suffer from shading, cell or module degradation, etc. With PV module prices at record lows, adoption of solar in California, Massachusetts and other markets is expected to reach record levels in 2012 which should help companies like Enphase do well.

BrightSource is a solar thermal company that is looking to build massive power plants in the desert. Although they too are a solar company, solar thermal is a much different market than Enphase’s carrying with it pretty intense project finance and capital investment requirements.

Different as they may be, the trading of three innovative clean technology companies is a good thing for the industry. It may help others raise public financing, and also help some later stage private companies that are looking to close that last round of financing finally find some willing investors.

Let’s hope that any who follow these companies already have a good communications strategy and PR plan in place to support their businesses throughout the entire process.

Jason Morris is an executive vice president and directs Schwartz MSL’s fast-growing Cleantech & Green PR Practice in San Francisco. Jason’s Cleantech experience includes working with and launching emerging market leaders in solar, greenhouse gas management and environmental compliance, Green IT, wind, green building, lighting controls and biofuels.


Originally posted on Schwartz MSL’s Renewablog

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