Mitsubishi Corp.’s road into the US solar business has taken the Japanese conglomerate to Liberty Square in Boston’s Financial District.
That’s the home of Nexamp Inc., the solar developer and installer that sold a “near majority” stake to a Mitsubishi energy subsidiary on Monday.
Paula Zagrecki, a vice president at Mitsubishi’s Diamond Generating Corp., says she hired advisory firm CohnReznick in January to vet potential investment targets in the commercial, industrial and community-shared solar space. At the same time, Nexamp chief executive Zaid Ashai was looking for new investors for his firm.
The timing, of course, was perfect for these two partners: Nexamp ended up being Mitsubishi’s top choice in this “beauty contest.” Zagrecki says the culture was a good fit, and the 45-person Nexamp team had the skills and expertise she sought. Plus, she says, Massachusetts has the right kind of policies in place to spur solar construction.
Zagrecki and Ashai aren’t saying much about the deal’s specifics, though Zagrecki concedes it could lead to a full acquisition of Nexamp in a few years. One thing is clear: Boston VC firm PJC, formerly known as Point Judith Capital, remains on board as a key shareholder.
Now, it’s time to expand. Ashai says Nexamp is currently active in five states and starting to make inroads in another three, all on the East Coast. As a result of Mitsubishi’s investment, Ashai says he hopes Nexamp can add another 5 to 10 states to the mix within the next 18 months, including California. Zagrecki says more deals with other solar installers could be part of that growth.
“Too often, we hear stories in Boston about companies that don’t scale,” says Ashai, referring to the longtime complaint that we have a relatively limited number of businesses that gain a national scope from here. “This is going to be different. This is going to be a company that scales nationally. ... Our goal is to have a national leading solar player that’s based here in Boston.”