After experiencing a COVID-19 induced revenue shortfall and a failed investment bank-run process earlier in the year, Varentec, Inc., with the cooperation of secured lender Windsail Capital, engaged Hilco Streambank to market Varentec and its assets for sale.
Varentec unlocks new energy savings through patented hardware and software solutions that reduce end user consumption, better integrate distributed energy resources to the grid, and autonomously control voltage irregularities at the grid-edge. A pioneer in the field, Varentec disrupted a slow-to-adopt industry by engineering an elegant and proven solution that has become a foundational component for efficiency savings at some of the largest investor-owned utilities in the United States. The solution brings intelligence and control to a legacy grid infrastructure that is struggling to meet current demands. The company was funded by Bill Gates, 3M, and Khosla Ventures and was awarded support from the Department of Energy’s prestigious Advanced Research Projects Agency for Energy (ARPA-E).
Hilco Streambank conducted a targeted process over 4 months, reaching out to more than 350 potential buyers, resulting in a number of indications of interest. The process culminated in an acquisition by Sentient Energy, a subsidiary of Koch Engineered Solutions. Sentient acquired substantially all of the assets and key contracts of Varentec, and also retained a majority of Varentec’s employees as of closing, enabling Sentient to continue to optimize a go-forward business from day one. This acquisition marked an important milestone in Koch Engineered Solutions’ vision of building a comprehensive smart grid platform to serve a modern age of clean and efficient energy. The sale not only resulted in complete satisfaction of the secured lender’s claim, but also resulted in distributions to junior secured creditors and equity holders.