Ohio-based onsite wind generation company One Energy is looking for series D funding as it prepares to close a separate $300 million capital raise for an unlisted project investment vehicle it is calling a yield company.
The firm (not to be confused with Seattle-based solar developer OneEnergy Renewables) has so far installed utility-scale wind turbines totaling 36 MW at the industrial sites of its clients, which include Whirlpool Corp., Marathon Petroleum and Lafarge Holcim.
The yieldco capital raise is intended to fund the company's next 150 MW of projects and is due to close around the end of the month.
While yieldcos are usually publicly listed and traded on an exchange, One Energy's will remain private, the company's CEO Jereme Kent tells PFR.
“As it grows we will likely bring in other institutional financiers, but we expect this to remain closely held with institutional investors," he says, adding that there are also no immediate plans to add debt at the yieldco level.
Deloitte Corporate Finance is advising One Energy on the yieldco capital raise, which is said to have drawn interest from U.S. pension funds.
Meanwhile, One Energy is aiming to raise between $65 million and $85 million by selling a 40% stake in the company, though the final size and structure of the series D transaction will depend on the proposals received from potential investors. The company is open, for instance, to convertible preferred structures, according to a pitch book seen by PFR.
The fundraising process has attracted various investors, including family offices, and a deal is due to close in August.
"Not a developer"
Founded by Kent in 2009, One Energy owns and operates the turbines it installs and sells their output, including renewable energy certificates, to its clients under 20-year fixed-rate agreements, which include an option to buy the projects at a later stage.
Onsite wind turbine installers are few and far between, and the company has sometimes struggled to come up with a snappy definition of its business model.
“We are not a developer,” reads the pitch book. “We are a whale hunter and we eat what we catch.”
Kent prefers the label "industrial utility", pointing to the fact that the company not only develops but also engineers, builds, operates, finances and owns its machines.
“We work directly with retail users," he says. "The real full-service parallel to that collection of services is a utility—we just happen to be one of the industrial variety.”
Since inception, One Energy has received $8 million in equity investment and financed its activities with $60 million of senior and $20 million of subordinated debt. The company's existing debt will need to be taken out as part of its recapitalization, according to the pitch book.