Quantum Capital Group to Acquire Cogentrix Energy from Carlyle in $3 Billion Deal
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Quantum Capital Group to Acquire Cogentrix from Carlyle for $3 Billion - Carlyle Group (NASDAQ:CG)
HOUSTON, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Quantum Capital Group and its affiliates ("Quantum") today announced that it has entered into an agreement to acquire Cogentrix Energy ("Cogentrix" or the "Company"), a premier U.S. independent power producer, from funds managed by Carlyle CG for a total consideration of approximately $3 billion. The Cogentrix platform is comprised of 5.3 gigawatts of efficient and flexible natural gas-fired power plants, located throughout PJM, ERCOT, and ISO-NE, which support the reliability, resiliency, and affordability of the U.S. electricity market. Headquartered in Charlotte, North Carolina, Cogentrix has a multi-decade track record of successfully acquiring, developing, constructing, operating, and optimizing conventional and renewable power generation assets throughout the U.S. Following transaction close, the Company will continue to be led by current CEO John Ragan and the existing Cogentrix management team. "We are at a critical juncture in the evolution of the domestic power market. Electricity demand is rapidly increasing thanks to explosive growth in data centers and AI, the reshoring of manufacturing, and the electrification-of-everything," said Wil VanLoh, Founder and CEO of Quantum. "This growth is occurring at the same time our grid is becoming more unstable with additions of intermittent renewable power and continued retirements of coal-fired generation. Now more than ever, we need reliable and efficient power infrastructure. This is what the Cogentrix assets provide." Michael MacDougall, Partner at Quantum, said: "We are thrilled to partner with the Cogentrix team. Having stewarded more than 18 gigawatts of assets over its 40+ year history, the Company is a proven leader in building, managing, and optimizing power generation assets of all technology types. We expect to meaningfully grow the Cogentrix platform, with a focus on gas-fired power generation, renewables, and battery storage. Our goal is to deliver clean, reliable, and affordable power to customers." Matt O'Connor, a Partner within Carlyle's Global Infrastructure team, added: "This is a win-win transaction for everyone involved as Cogentrix begins its next chapter of growth with Quantum. We are proud of the significant transformation Cogentrix has achieved under our ownership. We wish John and his team continued success as they expand their platform and seize numerous opportunities in the rapidly evolving U.S. power sector." "We are pleased to have supported Cogentrix's efforts to establish decarbonization objectives for its fleet of natural gas-fired power generation assets while continuing to support grid reliability, a critical balance required to effectuate the energy transition," said Pooja Goyal, CIO of Global Infrastructure at Carlyle. "This successful transaction is a testament to the deep sector expertise of our energy and infrastructure platform at Carlyle. We look forward to continuing our investment activities in this rapidly growing area, including partnering with our management teams on growth opportunities and deploying capital in new investments." "We are grateful for Carlyle's partnership, which has provided us with the tools and capabilities to capture a growing opportunity set within the U.S. power market," said John Ragan, CEO of Cogentrix. "As we look to the future, we are confident Quantum's deep knowledge of the energy markets, successful track record of business building, and risk management capabilities will drive significant long-term value for our customers, employees, investors, and other stakeholders." Guggenheim served as Quantum's financial advisor while King & Spalding and Vinson & Elkins provided legal advice to Quantum. Lazard served as Carlyle's financial advisor and Latham & Watkins as legal advisor. The transaction is subject to customary regulatory approvals and is expected to close between the fourth quarter of 2024 and the first quarter of 2025. About Quantum Capital Group Founded in 1998, Quantum is a leading provider of private equity, credit, and venture capital to the global energy and energy transition industry, having managed together with its affiliates more than $27 billion in equity commitments since inception. For more information on Quantum, please visit www.quantumcap.com. About Cogentrix Founded in 1983, Cogentrix is a leading independent power producer with a long track record of successfully acquiring, developing, constructing, operating and improving power generation assets across the United States. Further information is available at www.cogentrix.com. About Carlyle Carlyle CG is a global investment firm with deep industry expertise that deploys private capital across its business and conducts its operations through three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $435 billion of assets under management as of June 30, 2024, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 2,200 people in 29 offices across four continents. Further information is available at www.carlyle.com. Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group. Contacts Quantum Capital Group Kate Thompson / Erik Carlson / Madeline Jones Joele Frank, Wilkinson Brimmer Katcher 212-355-4449 Carlyle Brittany Berliner (212) 813-4839 Brittany.Berliner@carlyle.com Market News and Data brought to you by Benzinga APIs
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Carlyle to sell power producer Cogentrix Energy in $3B deal (NASDAQ:CG)
Private equity firm Quantum Capital said Monday it agreed to acquire U.S. independent power producer Cogentrix Energy from Carlyle Group (NASDAQ:CG) for $3B. North Carolina-based Cogentrix owns 11 natural gas power plants in some of the most energy-hungry markets across the U.S., including Texas, Pennsylvania and the New England region. Carlyle (CG) initially bought Cogentrix from Goldman Sachs in 2012 for an undisclosed sum and has since roughly doubled the power producer's assets by purchasing new power plants and expanding its business. Quantum founder and CEO Wil VanLoh told Financial Times it is unusual to get the chance to buy a large portfolio of gas power plants in markets experiencing such growth in power demand. "Electricity demand is rapidly increasing thanks to explosive growth in data centers and AI, the reshoring of manufacturing, and the electrification of everything," VanLoh told FT. "This is an opportunistic purchase and we plan to support the growth of the business." More on Carlyle Group An Update On Carlyle Group After Outperformance And M&A Carlyle Q2 2024 Earnings Preview Carlyle Group: A Strong Company But Trades At A Premium Seeking Alpha's Quant Rating on Carlyle Group
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Quantum Capital Group announces plans to acquire Cogentrix Energy from The Carlyle Group for $3 billion. The deal marks a significant shift in the power generation sector and highlights the growing interest in energy infrastructure investments.
Quantum Capital's Strategic Acquisition
Quantum Capital Group, a private investment firm, has announced its intention to acquire Cogentrix Energy Power Management, LLC from The Carlyle Group in a deal valued at $3 billion 1. This acquisition marks a significant move in the power generation sector and underscores the growing interest in energy infrastructure investments.
Cogentrix Energy: A Power Generation Powerhouse
Cogentrix Energy, founded in 1983, has established itself as a major player in the power generation industry. The company owns, operates, and manages a diverse portfolio of power plants across the United States 2. With a focus on fossil fuel and renewable energy sources, Cogentrix has been at the forefront of providing reliable and efficient power solutions.
The Carlyle Group's Divestment
The Carlyle Group, a global investment firm, acquired Cogentrix Energy in 2012 for an undisclosed amount 2. Under Carlyle's ownership, Cogentrix has continued to expand its operations and enhance its portfolio of power generation assets. The decision to sell Cogentrix comes as part of Carlyle's strategic portfolio management and capital reallocation efforts.
Quantum Capital's Vision
Quantum Capital Group, led by its founder and CEO Gage Mooring, sees this acquisition as a pivotal opportunity to expand its presence in the energy sector 1. The firm aims to leverage Cogentrix's expertise and assets to further develop and optimize power generation capabilities across the United States.
Deal Structure and Financing
The $3 billion transaction is expected to be financed through a combination of equity and debt. Quantum Capital has secured commitments from various financial institutions to support the acquisition 1. The deal's structure highlights the confidence investors have in the long-term potential of the power generation sector.
Industry Implications
This acquisition reflects the ongoing consolidation and investment trends in the energy infrastructure sector. As the demand for reliable and sustainable power sources continues to grow, private equity firms and investment groups are increasingly looking to acquire and optimize existing power generation assets 2.
Regulatory Approvals and Timeline
The transaction is subject to customary regulatory approvals and closing conditions. Both Quantum Capital and Carlyle expect the deal to close in the first half of 2024, pending the necessary clearances from relevant authorities 12.
Future Outlook
Upon completion of the acquisition, Cogentrix Energy is expected to continue its operations under the new ownership of Quantum Capital Group. The deal is anticipated to bring fresh capital and strategic direction to Cogentrix, potentially leading to further expansions and improvements in its power generation portfolio.
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