Impax Asset Management Ltd, the wholly-owned subsidiary of Impax Group plc, has revealed details of its growing portfolio of venture capital (VC) investments.
Following the highly profitable disposal last year of its investment in Cellex Power Products Inc, a Canadian fuel cell company bought by Plug Power Inc (NASDAQ: PLUG), Impax now holds investments in seven companies covering a broad range of environmental activities.
The portfolio includes three recent additions, New Earth Solutions, Nordic Windpower and Emergya Wind Technologies (EWT). Whilst New Earth is helping to tackle the growing challenge of diverting waste from landfill, Nordic and EWT are bringing established wind turbine designs into the commercial market. Impax has invested nearly £12m across these three companies.
Previous smaller investments have been made in Ensyn, a Canadian biomass pyrolysis technology; Pelamis Wave Power, the Edinburgh-based wave energy developer; Sterecycle, a UK autoclave waste treatment developer; and RecovCo, which developed a technology for improving aluminium recycling yields and then purchased Affimet, the largest French aluminium recycling business, from Alcan.
Nigel Taunt, Impax's Director of VC Investments, said: "Impax invests in later stage venture capital, fitting comfortably alongside our portfolios of environmental companies operating in public markets. They need to be candidates for flotation, a qualitative judgement that means we believe they could IPO within 2 years. We are now looking to commit at least £3m into each new investment, leaving headroom for follow-on support when required."
Impax is one of the UK's largest quoted environmental investment managers with over £1bn of funds under management or advisory mandates. The two flagship funds, Impax Environmental Markets plc and Impax Environmental Markets (Ireland), have around £600m invested largely in quoted environmental stocks worldwide, with 10% (c.£60m) available for later stage venture capital. If private company investments achieve a listing in due course, they move seamlessly into the quoted portfolio.
Companies welcome Impax's involvement as an investor because of its long standing expertise in the field. Speaking after Impax's recent investment in US wind turbine manufacturer Nordic Windpower, Steve Taber, Nordic Windpower CEO, said: "The managers of Impax are among the most knowledgeable and experienced investors in the entire cleantech space. We look forward to their guidance and judgement, as Nordic grows in the global wind industry."
Impax has invested alongside Goldman Sachs in both Nordic Windpower and Sterecycle, alongside Emerald and Rabo Ventures in EWT and with Wheb Ventures and Stonefund in RecovCo. Pelamis has a long list of well known investors on its share register.
"We see other venture capital investors as potential partners, not as competitors" said Jonathan Fogg, Investment Manager, VC Investments. "We hope that others will welcome us as co-investors because Impax can help build an investor book and groom companies for public markets. We're long-term investors, so an IPO can be a staging post along the way, not an automatic end game".
"We have a strong pipeline of potential investments and are always keen to meet both new companies in the environmental sector and potential co-investors. This is a fast growing area and the opportunities to create value are looking excellent," he added.
Nordic Windpower: £4.0m, February 2008
With offices in California, Sweden and London, Nordic Windpower manufactures and sells competitively priced and highly reliable utility-scale, two-bladed wind turbines to large and small developers and community wind projects worldwide. With 10 years of trouble-free operations, Nordic's innovative flexible technology is the result of a 30-year investment by the Swedish government and European Union.
Emergya Wind Technologies: E5.0m, January 2008
Emergya Wind Technologies Holdings N.V. is a Dutch- based manufacturer and supplier of wind turbines and turnkey wind parks. It specialises in the development and manufacture of advanced direct- drive (gearless) wind turbines. EWT was established in 2004 by the acquisition of the intellectual property of Dutch wind turbines manufacturer Lagerwey. The current product portfolio consists of the 750 KW and 900 KW series and EWT is also developing larger wind turbines for both onshore and offshore applications.
New Earth Solutions: £4.0m, December 2007
New Earth's technology is fully enclosed with a sophisticated air handling and treatment system. The technology prevents the output of the odour emissions or bio-aerosols normally associated with traditional biological treatment processes.
New Earth's processes were researched and developed over a period of 7 years and according to the Environment Agency's formal assessment are proven to divert over 80% of biodegradable municipal waste from landfill, whilst recovering dry recyclables. The technology is housed in low impact buildings and waste treatment is delivered through processes which are acceptable to local communities.
In 2007 New Earth secured a £50 million finance package from the full service commercial bank Norddeutsche Landesbank.
New Earth's technology services both municipal and commercial clients. New Earth is working with Asda to deliver the store's first zero waste to landfill supermarket in the UK.
Recovco: £1.5m, April 2007
RecovCo Ltd. is a UK-based specialist designer and operator of aluminium reprocessing facilities. Its unique and patented Rotary Tilting Furnace (RTF) technology has been successfully installed in two sites in the UK where it has demonstrated unprecedented operational performance and metal recoveries. Furthermore, the RTF technology offers best in class environmental performance.
Founded in 2004, it is RecovCo's vision to become the best reprocessor of aluminium dross and scrap in the world - in terms of operational excellence, environmental performance, customer service and profitability.
Sterecycle: £3.25m, November 2006 and January 2008
Sterecycle recycles waste that would typically be landfilled. Its proprietary autoclave technology treats unsorted domestic and commercial wastes and converts the organic portion into a renewable energy biomass. Non-organic waste - like glass, plastics and cans - is separated out and sent for recycling. The company has raised over £20m of equity finance to date and is planning to IPO within the next two years.
The first Sterecycle plant is under construction in Rotherham and will be opening for business in mid- 2008.
Ensyn Technologies Inc.: £1.0m, July 2006
Ensyn Technologies, based in Ottawa, Canada, has developed an industrial integrated biomass refinery which uses Rapid Thermal Processing (RTP) to produce biofuel and other valuable chemical products from what would otherwise be a waste source such as sawmill waste. Pyrolysis is the conversion of biomass into a liquid, from which chemicals and energy can be extracted. This energy can be converted into liquid fuel for heating, and eventually for transportation.
Pelamis Wave Power: £1.3m, April 2006 and June 2007
Pelamis Wave Power Ltd, formerly called Ocean Power Delivery Ltd, has developed a unique system to generate renewable electricity from ocean waves. The Pelamis Wave Energy Converter is the world's first commercial scale machine to generate electricity into the grid from offshore wave energy and the first to be used in commercial wave farm projects.
About Impax Asset Management Ltd
Impax Asset Management Ltd is a wholly-owned subsidiary of Impax Group plc, the AIM-quoted asset management company; Impax was founded in 1994 as a specialist finance house focusing on the markets for cleaner or more efficient delivery of basic services of energy, water and waste. Impax manages or advises over £1 billion of assets for institutional and private investors, across a range of listed and private equity funds. The venture capital investments are made on behalf of Impax Environmental Markets plc, a London-listed investment trust, and Impax Environmental Markets (Ireland), a Dublin registered open ended investment company.
For more information go to: www.impax.co.uk
About Nigel Taunt
Nigel joined Impax in 2001 and has over twenty five years experience in M&A and fund raising since qualifying as a chartered accountant in 1977. After seven year spells at BOC and as Finance Director of Christie Group, from 1992 to 1998 he was Finance Director of Yorkshire Environmental, owned by Kelda Group plc, and played a leading role in the ten-fold growth of that business to £100 million turnover. He managed a large number of acquisitions and divestments in waste management, water treatment, renewable energy and environmental laboratories. His responsibilities at Kelda also included directorships at Yorkshire Windpower, during the successful development of the Royd Moor and Ovenden Moor wind farms, Esmil Water Treatment and Babcock Water Engineering.
About Jonathan Fogg
Jonathan joined Impax in 2005 and has over ten years experience in the venture capital and private equity sector. Most recently he was Equity Fund Manager with Finance Wales Investments Ltd, a wholly owned subsidiary of the Welsh Development Agency (WDA) that provides funding for Welsh-based small and medium sized enterprises. His achievements include the establishment of an investment team of ten from a standing start, developing a Syndicate partners programme and raising a further £10m Fund.
Prior to that, he was Investment Manager with Corus subsidiary UK Steel Enterprises Ltd, where he completed sixty investments in a five year period and managed a portfolio of thirty four companies. Originally trained as an accountant, Jonathan has also worked for the Audit Commission, BDO Binder Hamlyn and Ernst and Young.
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