Alternative asset manager The Carlyle Group is to acquire the Red Oak power generation facility in Sayreville, New Jersey, and has separately closed on the purchase of five power plants in California.
The acquisitions, which were executed in conjunction with Carlyle’s power affiliate Cogentrix, bring the total enterprise value of power asset transactions since Carlyle funds acquired Cogentrix in late 2012 to more than USD1.2bn.
Robert Mancini, Carlyle managing director and chairman of the board of Cogentrix, says: “Since Carlyle funds acquired Cogentrix, our power team has committed approximately USD600m of equity capital. The North American power generation sector is evolving, and we see significant opportunities, both in the form of acquisitions and development, to create value for our investors.”
Red Oak, which is being acquired from Energy Capital Partners, is a 823-MW natural gas-fired combined-cycle power plant located in Sayreville, New Jersey. Red Oak currently operates under a long-term power purchase agreement and is part of the PJM Interconnection, the world’s largest and most liquid competitive power market.
The five California power generation facilities, together accounting for 320 MW, include the 122-MW Midway natural gas-fired plant in Firebaugh, California, as well as the CalPeak portfolio of four natural gas-fired plants totalling 198 MW in Escondido, Firebaugh, San Diego and Vacaville, California. Carlyle is acquiring the Midway plant from an affiliate of Starwood Energy Group Global and the CalPeak portfolio from the Blackstone Group’s GSO Capital Partners as well as affiliates of Starwood and Tyr Energy.
Equity capital for the transactions, terms of which were not disclosed, comes from Carlyle Power Opportunities Capital Partners, a power managed account, and Carlyle Infrastructure Partners, a USD1.2bn infrastructure fund. The Red Oak acquisition is subject to customary closing conditions.
“Red Oak is an attractive investment because it benefits from stable cash flow generation and is strategically located in a market that should benefit from strong secular trends,” says Mancini. “The California plants are all highly responsive and flexible facilities that represent important resources for transmission grid support and providing reliable power during periods of peak demand within California.”
Cogentrix, a portfolio company of Carlyle Power Opportunities Capital Partners and Carlyle Infrastructure Partners, is a developer, operator and manager of independent power plants in North America.
