aleo solar AG: Growing on the sunny side

Everyone knows them: Blue and black gleaming panels, located anywhere the sun shines. Photovoltaic plants generate electricity from solar energy. And global business in the environmentally friendly "home-made” energy is booming. More and more farms and private households are using solar energy plants for generating their own power. Once installed on the roof, the operator will receive a guaranteed return between 8% and 15%, depending on location and position of the roof. Today, 50,000 people work in this sector in Germany. They produce solar modules, cells and wafers, and many specialise in installing complete solar systems.

The amendment to the Renewable Energies Act in 2000 made the use of solar energy plants for the generation of electricity interesting from an economic point of view. And an attractive industrial development policy in the new federal states also made it easier to enter the market for industrial mass production of solar technologies. Jakobus Smit owned a wind park project management company at the time. He did not want to miss out on the big business solar energy and promptly changed sector. His idea was to establish a company for developing and producing high-quality solar modules for the German and international markets.

Changing from wind to solar energy with the help of private equity

Jakobus Smit managed to convince his wind power business partner of many years, Marius Eriksen, to take the step into the apparently profitable photovoltaic sector together. Finance was to be similar to that for the wind parks. Numerous private investors were to become shareholders in the company, especially for tax reasons. Jakobus Smit and Marius Eriksen therefore had enough time to develop a profitable company. In December 2001, Solar-Manufaktur Deutschland (S.M.D) was founded, which was renamed to aleo solar AG in 2006. The first modules came off the production line in summer 2002 and only one year later the company had made a name for itself. aleo modules were classed as the “Mercedes” amongst solar modules and the company generated its first profits.

But according to calculations, these profits came too early. A luxury, one would think. But this was in fact a big problem, as some of the 31 shareholders wanted to distribute these profits, which was not in the interest of the founders who wanted to invest this money in further growth. The conflict between the parties threatened the continuing success and future of the company. In 2004, the conflict between management and part of the shareholders escalated with two thirds wanting to sell their shares. 67% of S.M.D. was therefore up for sale and the private equity firm Hannover Finanz turned out to be the ideal solution.

S.M.D. was already very successful at that time. Hannover Finanz was convinced by the established network (left over from the old wind power days), existing customer contacts and highly motivated management. But the general conditions were extremely difficult due to the conflict of interest. Both parties nevertheless quickly came to an agreement. Hannover Finanz took over the 67%, of which management in turn acquired 15%. Jakobus Smit and Marius Eriksen therefore remained strong shareholders in their own company.

aleo Solar on the up again

Two years after Hannover Finanz came in on the act, sales went up by more than 100% and staff numbers more than doubled. The company was listed in 2006. Obtaining new capital was of utmost importance at that point as the only way to beat the competition was to expand and develop strong markets. “Hannover Finanz not only simplified our shareholder structure and therefore solved a serious problem, but it also made it possible for us to list the company,” explains Jakobus Smit.