Distress in Green Tech Leads to Secondary-Market Bargains

Bidders are snapping up insolvent startups' CNC machines, industrial robots, tools, parts and specialized tech and IP, observes Tiger Group executive

NEW YORK, Feb. 10, 2025 /PRNewswire/ -- Online auctions are featuring more assets from financially distressed startups in areas like solar energy, "green" packaging, experimental foods and electric vehicles and batteries, observed a Tiger Group executive.

"Some of these operators simply run out of money. Others face insufficient market demand or struggle to make good on promises of ambitious solutions rooted in 'disruptive' tech," writes  Chad Farrell, Managing Director of Tiger Commercial & Industrial, in an opinion column for ABL Advisor.

The sales are creating opportunities for others in the sustainability space to acquire specialized equipment and IP at liquidation discounts. More mainstream operators are finding rare bargains on conventionally useful assets such as gas-processing equipment, steel tanks, industrial robots and CNC milling machines, Farrell notes.

Secondary-market demand for green startups' assets can be significant. In the column, Farrell points to his division's $10 million auction of parts, tools, equipment and EVs formerly owned by Loveland-Colorado-based Lightning eMotors. The bidder response included 40,000 page views, 309 registrants and 3,371 bids for 644 lots.

In the piece, Farrell points to several other Tiger Group auctions involving sustainability-focused operators, including:

• A court-sanctioned Chapter 7 bankruptcy sale of assets from Lemnature Aquafarms' $14 million production and R&D plants in Florida. The regenerative agriculture company had tried to sell plant-based ingredients—essentially, green protein from waterlilies—to the food-and-beverage and healthy nutrition markets.
  
  
• A Chapter 7 sale of assets from green energy company Aqua Hydrex, which had aimed to extract hydrogen from water using electrolysis as a way to help decarbonize industrial operations, transportation and agriculture.
  
  
• The turnkey sale of Romeo Power's 215,000-square-foot EV battery assembly plant in California to Mullen Automotive.
  
  
• The auction of assets and IP from "grid-edge" tech startup Veloce Energy, which had created a deployment and operation platform for EV charging stations, commercial solar arrays and industrial storage facilities

In the latter sale, "some bidders vied for the company's battery energy storage systems; others went after conventional tools, parts, welders, forklifts, transformers, inverters, oscilloscopes and test equipment," Farrell observes.

But he cautions that when operators have an unprecedented, moonshot-type process, it can be challenging to sell their proprietary, highly specialized machinery and equipment (M&E) and inventory.

"In recent liquidations, such equipment has accounted for 20 to 30 percent of the assets on offer," Farrell notes. "All of that said, the sustainability space is full of newer companies with test modules, laser welders, CNC machines and industrial robots that are in excellent condition, or even still in the box, with tremendous resale value."

Farrell concludes the piece by encouraging lenders and disposition firms to focus on the green sector. "They already fully grasp the potential recoveries associated with the universal M&E described above," he writes. "Moving forward, they can continue to build their expertise and buyer relationships with respect to highly specialized assets as well."

Pointing to Tiger Group's upcoming liquidation of assets from Northvolt Ett Expansion AB, Farrell noted that the trend has continued into 2025. "We're currently accepting offers on $82 million of unused EV battery manufacturing equipment in Belgium and South Korea," he said. "These assets are from several brands and are still in their original crates and boxes."

The full article is available at:
https://www.abladvisor.com/articles/39992/distress-leads-to-more-auctions-of-green-machinery-equipment

Media Contacts: At Jaffe Communications, Elisa Krantz, (908) 789-0700, [email protected].

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SOURCE Tiger Group