Energy Investors Funds, an established private equity fund manager that invests in the US energy and electricity sector, has announced that its United States Power Fund III has completed t
Energy Investors Funds, an established private equity fund manager that invests in the US energy and electricity sector, has announced that its United States Power Fund III has completed the acquisition of 80 per cent of Cogentrix Energy’s interest in 14 power plants.
Cogentrix is a wholly-owned subsidiary of the Goldman Sachs group. Terms of the deal, which encompasses 2,331 net megawatts of generating capacity, have not been disclosed.
‘This is a landmark deal for our firm and will provide a cornerstone investment for our United States Power Fund III, which we closed earlier this year,’ says EIF managing partner Herbert Magid. ‘The Cogentrix plants are well constructed, well run and highly regarded facilities with strong operating histories.’
Cogentrix will retain a 20 per cent minority interest and will provide management services to the plants. The portfolio consists of power plants in 12 states that sell most of their generation capacity to local counterparties under mid- to long-term power purchase agreements or tolling arrangements.
‘This acquisition is the result of a collaborative effort among USPF III, USPF II, and our co-investors,’ says EIF senior partner Andrew Schroeder. ‘We believe our team brought value to the transaction and will receive significant value from the acquisition.’
Lehman Brothers was exclusive financial adviser to EIF and syndicated the co-investor equity involved in the transaction. Milbank, Tweed, Hadley & McCloy was lead deal counsel to EIF, while Bingham McCutchen was lead counsel for the equity syndication and special regulatory counsel to EIF.
Energy Investors Funds was founded in 1987 as a private equity fund manager dedicated exclusively to the independent power and electric utility industry. It seeks to create geographically and technologically diversified portfolios of electric power-related assets that provide superior risk-adjusted equity returns with current cash flow and capital appreciation.
EIF seeks to reduce fuel and electricity commodity risk by acquiring power assets with long-term off-take contracts. It manages more than USD3.3bn in capital in six private equity funds from its offices in Boston, New York, and San Francisco. The funds have made more than 90 investments with an asset value exceeding USD5bn.
Cogentrix Energy is an owner and operator of independent power and cogeneration assets in North America. After the closing of the sale to EIF, Cogentrix will continue to develop both conventional and renewable power generation in North America and international markets.