Exclusive-TPG in talks to acquire solar firm Altus Power, sources say

By David French

NEW YORK (Reuters) -Buyout firm TPG's climate investment arm is in talks to acquire Altus Power, a provider of solar power to commercial property owners and residential homes, people familiar with the matter told Reuters on Monday.

If the talks between TPG Rise Climate and Altus are successful, a deal could be signed in the coming weeks, said the sources, who requested anonymity as the discussions are confidential. 

The transaction has yet to be finalized, the sources cautioned, adding that another suitor could also approach Altus and that it was possible that no deal with any party would be reached.

Shares of Altus surged more than 23% on the news on Monday before paring some gains, giving the company a market value of nearly $650 million. Altus also had debt net of cash of about $1.1 billion as of the end of September.

Stamford, Connecticut-based Altus, one of the largest owners of commercial-scale solar plants in the United States, had said in October it was working with advisers to explore options including a potential sale.

Altus and TPG declined to comment.

A boom in artificial intelligence and data centers has been driving power demand higher, making clean energy providers increasingly attractive to infrastructure investors.

Founded in 2009, Altus operates commercial-scale solar power installations and provides energy storage and vehicle charging facilities. The company's portfolio currently produces about 1 gigawatt of power, according to its website.

As of Friday's close, Altus shares had lost nearly two-thirds of their value since the company went public in 2021 through a $1.6 billion merger with a blank-check acquisition firm backed by commercial real estate giant CBRE Group, as it faced increased competition from other clean energy providers.

CBRE remains the biggest shareholder in Altus with a 15.38% stake, according to LSEG data. Blackstone's energy arm, which provided $350 million in debt financing and committed $300 million in preferred equity as part of the SPAC deal in 2021, holds a 13.2% stake in Altus.

In recent quarters, Altus has witnessed an uptick in fortunes as it has signed new commercial property customers, amid a surge in demand for renewable energy. For the quarter ended September, Altus posted a 30% jump in revenue to $58.7 million, with net profit up more than 26% to $8.6 million.

TPG through its Rise Funds, including TPG Rise Climate, manages $19 billion of assets focused on backing companies that aim to drive social and environmental impact, according to its website.

(Reporting by David French in New York; Editing by Anirban Sen and Matthew Lewis)