Ruth McKee - MergerMarket.com - March 2012
TVP Solar, the Swiss developer and manufacturer of high-vacuum flat solar thermal panels, is in negotiations for a second round of B financing and seeks international manufacturing JV partners, chief executive Piero Abbate said.
Established in 2008, TVP Solar has received two rounds of financing with mainly individual investors. The two founders of the company, Abbate and the CTO, Vittorio Palmieri, are the main shareholders, with Abbate holding the majority. The Series A round was EUR 4m and the Series B round's first closing brought in EUR 4m more. TVP Solar is in advanced negotiations for a EUR 6m Series B second close but is considering extending the round to EUR 10m. Abbate said there is still an opportunity for an investor to join. The round is expected to close by April, and if there is an extension it will close by the end of the year. This equity financing represents the last dilutive step at the level of the Swiss company for a small minority stake. However, Abbate said to minimize dilution the company could consider mezzanine financing instead of equity for the extension.
The money raised so far has financed R&D concerning the core technology and engineering of the company’s product and is now financing the set up of its first volume manufacturing facility which is expected to go on volume sales from April 2013. Abbate expects to break-even by 2014.
The company is looking to grow through joint ventures in “large potential” end user markets initially, including India, Brazil and California, because of their high sun exposure, high cost of electricity and demand for energy. Following these markets, TVP Solar is targeting China and the Middle East. It is in discussions with two large industrial players in India for a JV.
Abbate will bring the intellectual property transfer related to manufacturing to the table and JVs should be with a local partner for manufacturing, marketing and sales.
“We are searching for local partners that cannot just provide financial resources, but could provide channels value added for marketing and sales,” Abbate noted.
Potential JV partners could be absorption chillers manufacturers, large desalination players, large display manufactures and large industrial players in general.
TVP currently runs a pre-series manufacturing line in Avellino, Italy, with a nominal capacity of 1,500 square meters of MT-Power panels that are dedicated to pilot installations in 2012, according to Abbate. The first volume manufacturing plant is currently under construction also in Avellino with a nominal capacity of 300,000 square meters of panels and with an investment of EUR 20m. India is expected to have 3x capacity of the Italian plant, Brazil 2x and China 5x. TVP Solar expects to optimize the production module to scale down the investment of 20% for JVs. He said JV financial parameters expect first margin about 50% and EBIT “well above” 20%.