Funds managed by affiliates of Apollo Global Management Inc. recently made a $150 million equity commitment to FlexGen Power Systems Inc., a technology firm providing solutions for energy storage, a market at the center of the energy transition representing a multibillion-dollar opportunity, according to a joint release.
“Energy storage assets play a crucial role in the transition to an economy powered by intermittent renewable energy sources,” commented Olivia Wassenaar, senior partner and co-lead of natural resources at Apollo, in the release on Aug. 25. “This transition to renewable power is happening at a time where reliability and resiliency are more important than ever for the grid in the face of increasing extreme weather events.”
Since its founding in 2009, FlexGen has supported deployments of more than 1.2 GWh of energy storage systems across the U.S. and internationally for utility, microgrid and C&I customers. The Durham, N.C.-based company’s proprietary software platform, HybridOS solutions, allows energy storage owners to deploy various power market strategies and combine storage solutions with any form of generation.
FlexGen, according to CEO Kelcy Pegler Jr., spent the past decade building the most advanced integration solutions in the market, adding that the energy storage market—the “most critical intersection” of the clean energy transition—is ready now to take off.
“Our work with Apollo will accelerate FlexGen’s growth, and the capabilities we can offer going forward while establishing the bankability that the market values when making energy storage investments,” Pegler said in the release.
FlexGen’s existing investors include Altira Group, the founding investor group led by Jerry Miller and Mark Dreyfus, Caterpillar Ventures and GE Ventures. Apollo’s investment will be made in partnership with FlexGen’s existing investors, Altira Group and the founding investment group led by Miller and Dreyfus.
“We see tremendous opportunities for growth and technological innovation in the energy storage sector as the grid relies increasingly on renewable energy,” Apollo Partner Trevor Mills added. “FlexGen’s engineering expertise and leading HybridOS software solution position it as an ideal partner for those looking to develop and operate energy storage systems.”
The investment in FlexGen extends Apollo’s track record of investing in and lending to companies supporting the clean energy transition.
Over the past 18 months, these have included:
- Invested in U.S. Wind, an offshore wind developer;
- Entered into a new venture with Johnson Controls to provide sustainability and energy efficiency services;
- Formed a joint venture to accelerate the growth of renewables royalties company Great Bay Renewables;
- Invested in electric-driven gas compression company TOPS; and
- Agreed to invest in sustainable bioenergy producer AS Graanul Invest.
The Apollo fund-sponsored Spartan series of special purpose acquisition vehicles have also announced or completed combinations with EV auto company Fisker, residential solar financing fintech Sunlight Financial and, most recently, Allego, a leading pan-European EV charging company.
Vinson & Elkins LLP acted as legal counsel to the Apollo funds. DLA Piper LLP provided legal counsel and Citi served as financial adviser to FlexGen.
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