How to Close a Deal with CleanCapital
Since we got our start back in 2015, operating solar acquisitions have been CleanCapital’s bread and butter. With the acquisition of 14 such portfolios totaling more than 400 megawatts under our belt—including 35 MW in New Jersey and 26 MW in Rhode Island announced in the past few weeks—our team has developed the deep expertise that’s made CleanCapital one of the Top Ten Commercial Solar Asset Owners in the U.S.
Below, I’m sharing my team’s key tips to achieving a smooth and successful acquisition.
By Julia Bell, Chief Commercial Officer at CleanCapital
1. Bid honestly.
When preparing an initial bids, we only propose bid prices that we can actually close on. It’s counter to our ethos to bid high with the expectation that we will cut the price later to boost our returns . This may mean we lose some initial bids, but it establishes upfront CleanCapital’s honesty and professionalism.
When CleanCapital wins a bid we take diligence seriously in order to truly understand the ins-and-outs of a project. Occasionally we find that some project costs were unintentionally excluded from the original seller model; in that case, we have a conversation with the seller about adjusting the purchase price accordingly.
Sometimes we run into issues early in the process that lead to honest misunderstandings or miscommunications about allocation of risk or benefit. In those cases, we try our best to work with the seller for a solution that works for both parties. Sometimes it means we are both a little less happy, but the deal is still profitable for everyone.
2. Keep the process friendly.
A sale transaction is a multi-week process that involves spending lots of time talking, so we want to work with people that we like working with. Everyone has a bad days—and we can certainly all get a little stressed at closing time—but being a jerk doesn’t help anyone. In any transaction there are obstacles and bumps in the road, but having a good working relationship with the seller makes it easier to find creative workarounds that get the deal closed.
Now that CleanCapital is a veteran owner-operator, we are seeing lots of repeat transactions from folks with whom we have a good working relationship. As an added upside, those repeat transactions often mean we have a set of agreed-upon transaction documents that can be reused, making those closings that much faster and cheaper.
3. Make a smooth handoff.
So we’ve closed a deal. Hurray! Now what? In our experience, one of the most important elements of maintaining a good (and hopefully repeat) relationship with a seller is ensuring a smooth transition of ownership.
One of the hardest parts for landowners, offtakers, lenders, and other third parties is that all of their contacts are suddenly gone and there’s a whole new set of folks to talk to. By working with the seller through the consent process, we make sure everyone is comfortable with their new contact people. And we tie up any loose ends by touching base with third parties to understand promises that have been made and work that is underway.
In our experience, sticking to these guidelines helps ensure a smooth and speedy acquisition process. And that means less money spent on attorneys and advisors on both sides and faster liquidity for sellers. CleanCapital’s approach—battle-tested by the acquisition and onboarding of 230+ projects—has earned CleanCapital a reputation as a straightforward and equitable investor.
Our team is seeking great partners to work with in the coming year. If you are an owner of renewable energy assets—or a developer with pipeline projects in need of additional capital—it’s time we connect. Please fill out the form below to be connected to a member of our business development team.