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Comverge, one of the largest demand response providers in the U.S., announced on Monday that it has agreed to a $49 million buyout by an affiliate of private equity firm H.I.G. Capital. Comverge said in a statement that the move addresses an “immediate need for capital,” and that it has been looking for more capital since the fall of 2010.
The buyout offer would deliver Comverge shareholders $1.75 a share, which is a 6.9 percent discount to its closing price on Friday reports the Wall Street Journal. The move would take the company private, and Comverge says it will “solicit alternative acquisition proposals from third parties for a period of 30 days.”
Comverge is a demand response aggregator, which means it turns down power-using equipment in commercial and industrial sites to help utilities manage peak energy consumption on the power grid. The company started a rebranding effort back in 2010, but Comverge’s shares have plummeted over the past couple of years.
Recently Comverge’s independent auditor found that there was substantial doubt about Comverge’s ability to continue as a going concern. In addition Comverge says its primary and secondary lienholders have issued amortization and default notices.
The affiliate of H.I.G. Capital, Peak Merger Corp, says it will provide $12 million in debt financing to Comverge.