US-Israeli thermosolar energy company Brightsource Energy Inc. plans to hold an IPO on Nasdaq on Thursday. The company plans to offer 6.9 million shares (14% of its share capital) at $21-23 per share, at a company value of $1-1.1 billion, after money. If the underwriters exercise their overallotment options, Brightsource will raise a gross $145-159 million. It will be traded under the ticker "BRSE".
Brightsource was founded in 2004 and moved its headquarters to Oakland, California, in 2008. It has development and testing centers in Har Hotzvim in Jerusalem and at Mishor Rotem in the Negev, which employ most of its 412 employees.
French electricity producer and wind turbines manufacturer Alstom SA (Euronext: ALO) is the largest strategic investor in Brightsource, with a 21.9% stake, after investing $130 million to date the company in several financing rounds. Alstom has announced that it will invest $65 million in the IPO at the price set.
Other prominent investors in Brightsource are VantagePoint Capital Partners, with an 18.6% stake, and Morgan Stanley (NYSE: MS), with 7.2%. Smaller investors include Russian government venture capital funds, California State Teachers Retirement System (CalSTERS), and oil majors Chevron Corporation (NYSE: CVX) and BP plc (LSE; NYSE: BP). Founder Arnold Goldman owns 5.2% and president and CEO John Woolard owns 1.5%.
Brightsource origins are in Israeli company Luz, founded by Goldman and Brightsource EVP engineering and R&D Israel Kroizer, in the early 1990s. Goldman, who did not give up on the solar energy dream, founded Luz 2, now a fully-owned subsidiary of Brightsource. Luz 2 changed its name to Brightsource in 2008, and moved its headquarters from Jerusalem to Oakland.
Brightsource has been planning an IPO for a long time, while raising capital from private investors and venture capital funds in the meantime. It raised $16.5 million in its first financing round in 2006 at a company value of $50 million. It raised $125 million in its fifth and last financing round in March 2011, at a company value of $700-800 million, after money. In April 2011, it filed a prospectus to raise up to $250 million, but the offering was not held at the time. The company has raised $539 million to date.
Brightsource lost $111 million on $159 million revenue in 2011. Its cumulative losses are $288 million, and it does not expect to become profitable until 2014, when several large projects under construction come on line.
Partnering with Google
The Brightsource-Alstom consortium is one of the three finalists in the tender to build the thermosolar power station at Ashelim in the Negev. Brightsource's first major project is Ivanpah in California's Mojave Desert, which has three thermosolar power stations.
The Ivanpah project's set-up cost is estimated at $1.6 billion, of which $1.37 billion is financing backed by the US Department of Energy guarantees. Two other major investors are Google Inc. (Nasdaq: GOOG), which has invested $168 million, and NRG Solar LLC, which invested $300 million in equity, not debt. Brightsource has longer power purchasing agreements amounting to $4 billion in potential revenue.
An analysis of the IPO by Renaissance Capital (an investor in several Israeli start ups) states that the IPO will not be easy, and that it might fail. It cites the company's heavy losses to date and that no profits are expected in the next two years. In addition, thermosolar power stations have a long lead time to build - 3-7 years - and require massive investment. Finally, electricity prices are subsidized by governments, which may not be able to afford the outlay.
Published by Globes [online], Israel business news - www.globes-online.com - on April 11, 2012
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