UTILITY AND waste management specialist NTR looks set to seek other acquisitions in the US to follow the €63 million deal it announced yesterday.
The Irish group has agreed to take a 51 per cent holding in Phoenix, Arizona-based Stirling Energy Systems (SES), which is developing solar-powered electricity generation plants, for $100 million (€63 million). The deal is NTR's first since it netted over €800 million from the sale of wind energy group Airtricity, in which it had a 50 per cent stake, to Eon and Scottish and Southern Energy late in 2007 and in the opening weeks of this year.
Group finance director Michael Walsh told The Irish Times yesterday that the current weakness of the dollar against the euro helped to make the deal attractive, and said NTR would continue to look for acquisitions in the US.
"This is a very good time to be looking for US assets," he said. "Particularly if your liquidity position is all in euros. We are constantly looking at opportunities and the US is a very important market for us."
He pointed out that as a result of the Airtricity deal, NTR has the resources to fund further expansion through buying up businesses in the sectors in which it is active.
NTR already has a number of interests in the US. Later this year, two biofuel processing plants that it owns in partnership with Richard Branson's Virgin group, will begin operating in Indiana and Tennessee. Along with this, it has waste management businesses stretching from Texas in the southwest through mid-western states such as Iowa, Michigan and Illinois, and into New Jersey in the northeast of the country.
SES is developing solar-powered electricity generating plants in the Imperial Valley and Mojave Desert in the south-western US, which get high levels of sunshine.
Mr Walsh explained yesterday that the American company's deal with NTR will allow it to commercialise these projects and bring them to "full utility scale".
When they reach that level, they will be able to produce 800 megawatts (mw) of electricity, the same amount of power as a sizeable conventional generating station.
Mr Walsh pointed out that 800mw is roughly equal to 20 per cent of the ESB's entire generating capacity. SES expects to begin producing power in two to three years.
SES has already secured power purchase deals with San Diego Gas & Electric and Southern California Edison, which are leading utilities in California, the state with the highest population in the union.
Commenting on the deal yesterday, NTR chief executive Jim Barry described SES as a business with high growth potential and said it had a leading cost position in a fast-growing sector. "SES's established presence in California places it at the forefront of solar technology development."
SES was founded in 1996 and uses its own SunCatcher technology to capture and concentrate solar power to generate electricity. Along with its Arizona headquarters, it has offices in California and test sites in New Mexico.
