PrivateEquityintheSunshine P i t E it i th S hi

MatthiasVandepitte LodeVanLaere Lode Van Laere

Photo:24MWSolarPVplant,Montalto diCastro,Italy

Whoarewe? Who are we?

Matthias Vandepitte (MBA 2011)
PRE-MBA Electromechanical Engineer ( g (KU Leuven 2003, Belgium) 6 years with ExxonMobil, refining and supply in Belgium and Italy POST MBA Associate in the VC division of GIMV, European Investment company with 2Bn under management. Focus on cleantech.

Lode Van Laere (MBA2011)

PRE-MBA Electromechanical Engineer ( g (Ghent University 2006, Belgium) 3 years with Arthur D. Little, management consulting in Belgium and Middle East POST MBA Consultant at The Boston Consulting Group, based in Brussels

Co-organized the London Business S C School's European Clean Tech C Challenge where we met Giles Clark, CFO of SunRay

Started working on the 2YP in June 2010 yes we are dorks

Thethreeobjectives The three objectives

1 IntroducestudentstoaPrivateEquitysuccessstory intherenewableenergy 2 Effectsofthedifferentownershipstructuresonthe governancemodel 3 DiscusslimitationsofPrivateEquitymoney:yes, theyexist! ey e s

Thethreeobjectives The three objectives

1 IntroducestudentstoaPrivateEquitysuccessstory intherenewableenergy 2 Effectsofthedifferentownershipstructuresonthe governancemodel 3 DiscusslimitationsofPrivateEquitymoney:yes, theyexist! ey e s

SowhatwasSunRaydoinginSolarPV development? d l t?
1 Prospect 2 Option 3 Buy& y Finance 4 Construct 5 Sellor operate

Crystalline Silicon

ThinFilm

Concentrated(CPV)

RooftopmountedPV

GroundmountedPV

TheSunRaystoryin2minutes y y

STARTUP

PRIVATEEQUITY

CORPORATE

Whatwastheinvestmentrationale?
Constant guaranteed income stream for 20 years as long as the sun shines High growth market Mature technology Bankable process Highly subsidized Great project economics

SunRay buildsamulticountrypipelineover theentirevaluechain the entire value chain

Multic country SunRay

Largeprivatecompanies(e.g.utilities) Sin nglecoun ntry

Localdevelopers

Prospect

Option

Buy& y Finance

Construct

Sellor operate

DenhamCapital Denham Capital

Globalprivateequityfirm p q y Investsincommodities,energyandnaturalresources. $4.25billioninassetsundermanagementinMay2008 Committed$2Bofcapitalto33portfoliocompaniesworldwide.
$5bn $ b
Power

DenhamFundsIV
$4bn

DenhamOffices
ShortHills Boston London

Renewables

Carbon

$3bn
Total

$2bn

Natural Resources

Commodities Infrastructure

$1bn
I-III IV

Houston

So Paulo

$0bn

I III

IV

T t l

InvestmentrationaleforDenhamCapital p Longtermgrowthbusiness ImpressiveCEO&managementteam Impressive CEO & management team Aggressivedevelopmentpipeline(>300MWp) Multicountryapproach After taxleveragereturns>20% Aftertax leverage returns >20%

Theresult:Montalto diCastro(2009) ( )

Photo:24MWSolarPVplant,Montalto diCastro,Italy

WhatweretheexitoptionstoSunRays investors? i ?
IPO Tradesale

OPPORTUNITIES

Managementincontrol Nointegration requirement

Accesstobalancesheet

CHALLENGES

Requirementtobuildup assetsforIPO

Integrationchallenges

AndthuscameSunPower And thus came SunPower Corporation

2010:Revenue$2.2B 5,500+Employees 550+MW2010production >1.5GWsolarPVdeployed WorldleadingsolarPV:22% conversionefficiency Diversifiedportfolio:roofsto powerplants 5GWpowerplantpipeline

Thethreeobjectives The three objectives

1 IntroducestudentstoaPrivateEquitysuccessstory intherenewableenergy 2 Effectsofthedifferentownershipstructuresonthe governancemodel 3 DiscusslimitationsofPrivateEquitymoney:yes, theyexist! ey e s

Changesingovernancestructure g g
CHANGEFROM ENTREPRENEURIAL VENTURETODENHAM CHANGEFROMDENHAM CHANGE FROM DENHAM TOSUNPOWER

ADVANTAGE

Morestructure Betteraccesstocapital andtalent d l

Accesstocheaper capital T h l i lk Technologicalknowhow h

DISADVANTAGE

More controls Morecontrols Slowerdecisionprocess

Fixedto1supplier pp Expectationsforpublicly quotedcompany

Thethreeobjectives The three objectives

1 IntroducestudentstoaPrivateEquitysuccessstory intherenewableenergy 2 Effectsofthedifferentownershipstructuresonthe governancemodel 3 DiscusslimitationsofPrivateEquitymoney:yes, theyexist! ey e s

Limitations of PE? ofPE?

If you wanttolearn moreabout them,take the PE/VC elective Or emailus @:
Matthias.vandepitte@gimv.com Van.Laere.Lode@bcg.com

What we got out of this? wegot outofthis?

NetworkinEuropeanPE/VCworld / KnowledgeofEuropeanRenewableEnergy industry i d t Experienceasuccessfulcompanyfromstart toexist to exist Convert100pagesoftranscriptsintoa useableacademicdocument useable academic document Case(andname)publishedin"International PrivateEquity ourmomswereproud Private Equity" our moms were proud Gettinggrilledbytheclassmatewhenour g g casewasbeingtaught

Questions?