Case Study

Entrepreneur Owner-Manager: Founder

NRG Systems, Inc. acquired by ESCO Technologies Inc.

NRG Systems, Inc. is the global leader in the design and manufacture of highly-engineered wind resource assessment and plant optimization equipment for the renewable energy industry.  Founded in 1982, NRG has been at the forefront of the wind industry for 35 years; the company’s products have facilitated the development of two-thirds of all the wind energy generated worldwide.

Bigelow Assignment

NRG Systems was the life’s work of a passionate and dedicated owner who was looking to transition to her next chapter.  The owner had built a unique culture over three and a half decades with enthusiastic employees who shared a common passion for building a cleaner world fueled by renewable energy sources.  It was critical to find a new owner who would share the same beliefs while bringing additional growth opportunities and resources to the company.

Unique Challenges

Since its infancy, the wind energy industry has experienced significant cyclicality driven by regulatory and market forces.  Many independent companies in the industry had difficulty weathering prior cycles and were either acquired or closed.  NRG had withstood the test of time, creating a globally-recognized brand and product suite that was viewed as the benchmark among its peer group.  Its legacy products served a small industry niche, but the company was rich with R&D and ideas for growth outside its current niche.

Could Bigelow find investors outside the renewable energy space, and how would those investors view the risk around government policy influence?  How would investors value NRG’s historical niche dominance? Would they value the engineering and product development talent that could drive revenue growth going forward?

NRG’s headquarters was highly valued by ownership; would investors want to acquire the real estate or be willing to separate it from the operating company?

Outcome

Bigelow worked with NRG over many years in advance of a transaction to help determine the optimal time to begin conversations with investors.  The entire management team (eight members) was part of the pre-transaction planning and positioning.  Additionally, Bigelow and NRG commissioned a third-party market study to validate the industry opportunity.  Bigelow’s investor outreach found multiple types of interested investors: in-industry strategic, adjacent strategic, and private equity.

The ultimate acquirer, ESCO Technologies Inc., through its Utility Solutions Group (Doble Engineering), provides diagnostic instruments, software, and services for the benefit of the electric utility industry and industrial power users. Its customers were typically large legacy energy companies who are increasingly focusing on renewable and distributed energy sources.  NRG was a platform in the renewable sector that would allow ESCO to serve its customers with highly-engineered products that were complementary to ESCO’s current offerings.

As part of the transaction, 100% equity interest in the real estate was retained under an extended long-term lease term with ESCO.

“I am so appreciative of Bigelow’s professionalism and hard work. Their team was in lockstep with me from beginning to end. I felt personally taken care of, and I knew the company was in good hands. I don’t imagine we could have achieved the same success without Bigelow’s involvement.”

Jan L. Blomstrann, Chairwoman & Owner
NRG Systems, Inc.

“Thank you to the Bigelow crew for shepherding us through every step of the process. They were with us through thick and thin. Their coaching prepared us to meet the challenges along the way, and their leadership facilitated the successful outcome for all parties concerned.”

Justin P. Wheating, President & Chief Executive Officer
NRG Systems, Inc.