Beacon Private Equity Deal is a Bright Spot for US Department of Energy Loan Program

March 05, 2012

March 5, 2012 (Mountain View, CA) – Mark Ostrau, co-chair of the Cleantech Group with Fenwick & West, was recently quoted in the Law360 article, "Beacon PE Deal Bright Spot for DOE Program, Experts Say."

The recent sale of the smart-grid technology firm, Beacon Power Corp., to a group of private equity investors highlights the success that can come from the US Department of Energy Loan Program, particularly in the wake of the Solyndra failure.

Through a DOE loan in 2012, Beacon created a one of a kind energy storage flywheel, but despite this innovative clean technology, the firm was forced to file for bankruptcy protection in October due to a discriminatory rate structure that cut into the market value for their services. However, investors have taken note now that new FERC rules could increase the company’s revenue as much as five times.

Mark Ostrau, chair of the Cleantech Group with Fenwick & West, says, "There are a lot of failures – and I expect more to come – that are the result of running out of cash before the regulatory structure or market could support what are technologies that continue to have promise."

As investors try to turn around Beacon from bankruptcy protection and create a viable business, they are also demonstrating that riskier technologies could be worth backing, despite the failures of the past.

Click here to read the full article from Law360 (subscription required).