Reducing the U.S.'s dependence on traditional energy sources has been the talk of discussion for years, and while the shift toward alternative solutions has begun, the current projects that have been completed or those that are in the various stages of development are just the tip of the iceberg.

Efficiency is the name of the game, a buzzword that can be applied to many different industries, but none more so than in the energy sector.

Being green is more than just adopting wind or solar technology. This is where Ameresco (AMRC) fits into the puzzle, as the company is one of the leading providers of energy efficiency solutions, enabling its customers to reduce energy consumption, as well as lower operating and maintenance costs.

AMRC's primary service offering includes the development, design, engineering and installation of projects that reduce the energy, operations, and maintenance costs, with a range of measures implemented for each facility, designed to improve the efficiency of heating, ventilation, air conditioning and lighting systems.

The other segment of its business is focused on developing and building small-scale renewable energy plants. More recently, the company has begun to sell and install PV panels and integrated PV systems converting solar energy to power, as well as design and construct renewable energy plants based on wind power.

AMRC's services appeal to a diversified group of customers, with the company providing its solutions to governmental, educational, utility, healthcare and other institutional, commercial and industrial businesses. During fiscal 2009, the company sold its services to over 1,000 customers, while no single client accounting for more than 10% of its total revenues.
  • Ameresco -- AMRC
  • Lead Underwriter - Bank of America Merrill Lynch
  • 8,696,820 million Class A Common Stock
  • Current price range -- $14 to $16
  • Deal size to the mid-range -- $130.45 million
  • Sector: Electric -- Integrated

From a competitive perspective, AMRC has emerged as one of the front runners in the space, as it's one of the few large, independent energy efficiency service providers, securing over 30% of the projects that have been awarded since Oct. 1, 2008 through February, 2010 from the U.S. Department of Energy as it relates to programs associated with energy savings performance contracts.

Currently, AMRC has 54 offices in 29 states, in addition to operating in four Canadian provinces, with the company looking to expand into Europe, as there are significant growth opportunities that exist internationally.

Turning to its financials, AMRC has posted steady top-line growth over the past several years, as the number of projects on both the energy efficiency and renewable sides of its business continue to increase. Moreover, AMRC has registered profitable returns on a steady basis since 2002. Perhaps more important is the fact that despite the recent economic recession, AMRC's results have remained vibrant, as the significant demand for services/solutions such as these overrode the significant cutbacks that impacted many sectors of the market.

With many organizations looking to trim back its costs, it's solutions such as those offered by AMRC that led to continued improvements across its income statement.

The fact is that there are many reasons for an investor to like this deal. Manageable debt, vibrant financial results, a solid operating model, as well as robust demand make this a compelling offering.

Furthermore, there remains no private equity component, while its management team has a significant amount of experience within the industry. The only wild card here is broader market conditions.

AMRC appears to have all of its ducks in a row, yet the risk of a break in its IPO price remains a threat, as even the more fundamentally sound offerings have been unable to gain significant support in the aftermarket. Price breaks should be seen as a buying opportunity, as the longer-term potential for this company shouldn't be overlooked.

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