Tesla, BrightSource IPOs could be late 2010

SAN FRANCISCO Thu Sep 10, 2009 9:37pm EDT

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SAN FRANCISCO (Reuters) - Electric vehicle maker Tesla Motors and solar thermal energy firm BrightSource Energy would not launch their initial public offerings until 2010 if market conditions don't improve, a venture capital investor in both companies said on Thursday.

"There's a group of companies that is pretty close (to an IPO)," Stephan Dolezalek, managing director of VantagePoint Venture Partners, told the Reuters Global Climate and Alternative Energy Summit in San Francisco.

Tesla, BrightSource and smart-grid networking firm Silver Spring Networks are among the most likely candidates, he said.

"If the market stays the way it is today, at the earliest is end of 2010," he said, referring to potential IPOs from Tesla and BrightSource. "There is no rush to go public."

After a spate of IPOs by alternative energy companies in 2007 that performed well, there have been very few newcomers to the market.

Both Tesla and BrightSource, which has $9 billion in booking contracts for solar plants, have no urgent need to tap the public markets but being a successful company is "critically important" for growth, Dolezalek said.

"Most of us have a longer term view. The IPO is a financing event, it's not an exit," Dolezalek said. "We easily see those companies as being $5 billion to $10 billion."

Silicon Valley-based venture fund VantagePoint has funded more than 20 green technologies companies that cover a number of sectors including solar, electric vehicles, technology that extracts fertilizers from waste water and biofuels.

Its investments include electric car infrastructure firm Better Place, LED manufacturer Bridgelux, biofuel firm Solazyme, energy efficiency firm Tendril along with Tesla and BrightSource.

Both BrightSource and Tesla are on a growth path. Tesla said operations were profitable for the first time in July, when the electric car manufacturer shipped a record 109 electric sports cars.

Privately held BrightSource has picked up big contracts to deliver solar thermal power to California utilities Edison International Inc (EIX.N) and PG&E Corp (PCG.N).

BrightSource's Chief Executive John Woolard told the Reuters Summit on Tuesday that the health of the public markets was a major consideration.

"They are perfectly capable of raising money," Dolezalek said. "There is no pressure to say let's rush this into a public market where things are still uncertain."

VantagePoint, which has more than $4.5 billion in committed capital overall, has a sector-specific investment strategy focused on funding the leading companies in the sector it believes has big potential to grow such as solar thermal and energy storage.

Dolezalek said he expects cleantech IPOs to debut in the fall.

"I suspect (A123 Systems) will be first," he said. "I think at least there's a 50-50 chance that somebody else will be the first out."

Lithium ion battery maker A123 System, which counts General Electric (GE.N) among its investors, has set terms for its IPO in a regulatory filing with the U.S. Securities and Exchange Commission this week.

The company, which Chrysler has chosen to produce lithium-ion batteries for its upcoming electric cars, set an IPO price range of $8 to $9.50 per share, which would raise up to $244 million, based on the 25.7 million shares it plans to sell.

A123 System's efforts at raising money from public markets is being closely watched by the green technology sector. Analysts have said a successful IPO from A123 could jump-start the cleantech IPO sector.

Dolezalek said the green market needs a successful model.

"It requires a bellwether company so that people could say you can actually make a return," he said.

(Reporting by Poornima Gupta; Editing by Phil Berlowitz)

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