Fundraising

Diamond Castle returns to buy all of Catamount

New York-based Diamond Castle Holdings has agreed to acquire the 49 percent stake of wind energy generator Catamount Resources that it doesn’t already own. The firm had bought a 51 percent stake in Catamount last month.

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Diamond Castle Holdings, the Lawrence Schloss-led DLJ Merchant Banking spinout, inked its first deal in mid-October buying a controlling, 51 percent stake in wind energy generator Catamount Resources Corporation. Vermont-based utility Central Vermont Public Service, which sold the stake, had held onto the balance of the company, but this morning announced its intention to divest its entire stake in Catamount.

The Kavelstorf Windfarm, located in Mecklenburg-Vorpommern, Germany

In the initial purchase, Diamond Castle had pledged to commit $62.5 million in the original investment, and in this latest purchase the firm agreed to invest $60 million, giving Catamount an enterprise value of $122.5 million (€104 million).

Initially Diamond Castle said it would buy the 51 percent interest in Catamount in separate phases stretched across a three-year window. Central Vermont Public Service had retained an option to divest the entire business, but there was a condition that it had to complete a wind development project in Texas before it could exercise that option. Diamond Castle, however, agreed to waive that condition, setting the table for this latest purchase, which is expected to close in December.

Catamount, based in Rutland, Vermont, was formed in 1986 and has focused exclusively on wind development since 2001, according to a statement. The company, headed by James Moore, maintains six operating projects in the US and Europe, and currently has eight others in development in areas such as Wales, Scotland, Pennsylvania, Texas and Vermont. 

Diamond Castle is currently investing out of its debut fund, Diamond Castle IV, which is in the process of a $2.5 billion fundraising. The firm was founded last year when Lawrence Schloss, the former chairman of DLJ Merchant Banking, left with other DLJ executives to start the new group.

Central Vermont Public Service, a publicly held company, said it would use the proceeds from the sale to return roughly $52 million to its shareholders, although it did not indicate whether that would occur through a stock buyback or a special dividend.