Marathon Capital announces Cypress Creek takeover of FLS Energy

Marathon Capital LLC announced Nov. 28 that solar power project developer FLS Energy is to be acquired by Cypress Creek Renewables.

FLS is a leading owner, operator and financier of distributed generation solar projects and has developed more than 300 MW of projects across North Carolina and other Southeastern states. In addition to managing the company’s owned asset portfolios, FLS provides complete in-house EPC solutions for commercial-scale distributed generation and utility scale project development. The company’s growth and expansion was facilitated by a strategic investment from New Energy Capital.

Marathon Capital said it served as the exclusive financial advisor to FLS Energy and led a comprehensive market outreach initiative to identify a strategic partner for the FLS team. Cypress Creek’s long-term vision and established market penetration will be complementary to FLS’ business model, development expertise and robust pipeline, it added.

“Marathon Capital, has been an invaluable partner and advisor through this acquisition process,” said Dale Freudenberger, CEO of FLS Energy. “From their initial analysis of the market, comparisons of financing options, and assembly of our CIM, they have been involved in and guided our entire process. Marathon Capital worked closely with us to quickly narrow our options and then assisted with complex modeling and extensive due diligence to help us get to this final deal.”

“We are seeing very strong demand in the market for integrated and scalable platforms with a full suite of in-house project development capabilities,” said Terry Grant, Managing Director at Marathon Capital.

Marathon Capital is a leading financial advisory and investment banking firm focused on providing financial advice in the areas of M&A, capital raising of debt and equity, project finance, tax equity, financial restructuring, recapitalization, bankruptcy and workout situations in the global energy and infrastructure markets.

The takeover had been revealed earlier in November. Innovative Solar 43 LLC and Innovative Owner 43 LLC had applied Nov. 7 at the Federal Energy Regulatory Commission for approval of the sale of a 38.9-MW (ac) solar photovoltaic facility that is currently under development in the Town of Ivanhoe, Bladen County, North Carolina. They asked that FERC approve the acquisition by Cypress Creek Holdings LLC of 100% of the outstanding common and preferred stock in FLS Energy from the stockholders of FLS Energy. Upon consummation of this transaction, Cypress Holdings will acquire an indirect controlling interest in both of the applicants and the Innovative Solar 43 project.

Innovative Solar 43 and Innovative Owner 43 are affiliates and indirect subsidiaries of FLS Energy. Innovative Owner 43 owns the project,. Innovative Solar 43 will operate the project, control all physical assets comprising the project, and sell all of the output.

The project is located within the Duke Energy Progress (DEP) balancing authority area in the Southeast region. The applicants expect the project to begin generating test power in December 2016 and to achieve commercial operation prior to Jan. 1, 2017. Innovative Solar 43 is committed to sell the entire output from the project under a 10-year power purchase agreement with DEP.

FLS Energy is a full-service solar energy provider that, indirectly through its subsidiaries, owns and operates a portfolio of solar energy assets in North Carolina.

Cypress Holdings has a primary place of business in Santa Monica, California. Cypress Holdings is engaged in the energy industry and in constructing renewable energy projects.

Said the Nov,. 7 application: “Upon consummation of the Proposed Transaction, (1) Cypress Holdings will own one hundred percent (100%) of the outstanding common and preferred stock in FLS Energy and have the right, through FLS Energy, to control the Applicants and the Project on a day-to-day basis and (2) the Stockholders will no longer have any control over FLS Energy, the Applicants, or the Project.

“Cypress Holdings does not directly own or control any electric generating or transmission assets or generation output. Ownership of the renewable projects of Cypress Holdings is structured primarily through two subsidiaries, Cypress Creek Renewables, LLC and Cypress Creek Power, LLC. Through these subsidiaries…Cypress Holdings is a national provider of solar farms with over $1.5 billion raised and invested, with approximately 587 MWs expected to be operational by the end of 2016 as part of a total of over 4 gigawatts of solar generation either deployed or under development.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.