Q4 2017 North American Power Deals
January 30, 2018
Driven by mega deals and renewable activity, the North American power and utilities market stayed active in Q1 2018, but Canadian deal-makers were conspicuously absent from the Top 10 based on deal value.
The total number of North American power and utilities deals decreased 21% in the first quarter of 2018 compared to Q4 2017, but deal value rose by 60% to US$28.9 billion in the same period thanks to two mega deals, which accounted for 77% of total deal value.
In the United States, results in the first quarter were strong due to fewer uncertainties about tax reform, a unique window of opportunity for solar and wind energy assets and a continuing drive to rationalize portfolios. In Canada, the lack of high-profile deals could have been because of power and utilities players spending their time managing recent transactions or taking a more cautious approach as they surveyed the aftermath of U.S. tax reform.
The largest deal of the quarter was Dominion Energy’s acquisition of SCANA Corp. for US$14.5 billion, which was 50% of the total deal value of the quarter (US$28.9 billion). Coming in second, Global Infrastructure Partners agreed to acquire Zephyr Renewables LLC in a deal estimated to be worth US$7.9 billion.
Renewable deals represented 36% of total deal value for the quarter, a comparably high proportion of the market and due in part to the Zephyr deal. Investors took advantage of the window of opportunity in the segment as growing efficiency continues to reduce cost while an assortment of phasing down government incentives encourage investment.
- Ken Goodwin, National Deals Leader, Power & Utilities
Overall deal value increased significantly in Q1 2018 over the previous quarter, jumping by 60 percent in terms of deal value as compared to Q4 2017, despite a 21 percent decrease of deal volume.
The renewable sector accounted for 36 percent of deal value in Q1 2018, a comparably high proportion of the market.
Strategic and Corporate deals drove the deal value this quarter, 64 and 89 percent respectively of total deal value in Q1 2018.
Inbound deals were limited in the quarter in terms of deal value, however still maintained a presence in deal activity with four total deals in the quarter.
January 30, 2018
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