Energy efficiency is the quiet giant in mergers and acquisitions.

Over the past five years, venture capitalists have invested $3.3 billion into 342 energy-efficiency companies, according to Laurie Yoler, a partner at GrowthPoint Technology Partners, at the State of the Clean Green Industry conference taking place at the headquarters of Sun Microsystems.

A total of 112 companies concentrated in energy efficiency were swooped up in acquisitions. Just as important, there were 100 different buyers. Last year, Greentech Media pointed out that efficiency passed biofuels to become the number two segment for green VCs in the middle of 2008. Solar is still number one (see Greentech Investments See Record 3Q and VC Investing in Green Will Plunge 40%, Estimates One VC).

There is a big, massive qualification to Yoler's figures. The efficiency totals include virtualization software and virtualization companies comprise the largest subsegment in the efficiency numbers, she said. Virtualization software – which allows a server to perform more tasks at once – saves energy, but that's only one driver for virtualization.

Still, the factors are favorable. Energy-efficiency companies don't require the same massive capital investments that a lot ofsolarcompanies do. As a result, it's tough for solar companies to get acquired. By the time they get large enough to buy, they are too expensive, forcing them to try to pull off an IPO. There is also a somewhat limited number of potential buyers.

"If you are in energy efficiency, you've got a lot of buyers," she said. "We see that as a really vibrant market, as far as M&A is concerned."

Nancy Pfund, a managing director at DBL Investors, concurred somewhat. Smart meter and efficiency software companies could find exits over the next few years. Potential buyers include Siemens and IBM.

Being acquired, though, still isn't easy. Kjersten Barley of GE Capital Finance said that GE doesn't buy a lot of early-stage science-experiment companies.

"We won't make a Cisco-style acquisition where we buy some scientists," she said. "What we want to buy is a publicly traded company that has to make a number every quarter. "
Even if it's a private company, GE wants to pretty much buy established players generating revenues and profits, she said.

Nonetheless, Barley said that the less capital-intensive businesses, like efficiency ones, should do well in the near term because they won't be as impacted by the current crisis.