Buyout firm Energy Capital Partners (ECP) and its co-investors are edging closer to agreeing a deal for the $30bn sale of Calpine to Constellation Energy, according to a report by Reuters citing unnamed sources familiar with the matter.
Calpine was taken private in 2017 in a $17bn transaction led by ECP, alongside co-investors CPP Investments and Access Industries. Over six years, the private equity consortium focused on operational improvements, geographic expansion, and capitalising on surging power demand, positioning Calpine for a sale.
According to Reuters sources, the transaction, which could be announced as early as Monday, will see constellation pay mostly stock, with a small cash component, with the purchase price including around $12bn of Calpine debt which the buyer will absorb.
Under its current private equity owners, Calpine expanded its portfolio of gas-fired power plants and solidified its position in key markets, including Texas and the West Coast. These assets, valued increasingly highly amid surging US power demand, align with Constellation’s strategic objective to diversify its predominantly nuclear generation base.
If finalised, this acquisition will rank among the largest in the US power industry since TXU Corp’s $45bn leveraged buyout in 2007.
