Midstream deal spree for Carlyle

The private equity firm has bought an 832MW New Jersey station to complement 320MW in newly acquired West Coast power assets.

The Carlyle Group has acquired the Red Oak power facility from Energy Capital Partners (ECP) amid an acquisition spree in the midstream space, the private equity firm announced.

Carlyle, in conjunction with Cogentrix Energy Power Management, its “power affiliate”, agreed to purchase Red Oak from fund operator Energy Capital, but did not reveal the cost of the deal. Liz Gill, a spokeswoman with Carlyle in Washington, D.C., did not respond to a voicemail message asking for further comment.

In addition to moving to take ownership of Red Oak, a “highly efficient” 823-megawatt (MW) combined-cycle natural gas turbine located in New Jersey, Carlyle closed on two separate transactions for five power generation plants in California accounting for 320MW, the private equity firm said.

Carlyle purchased ‘CalPeak Power,’ a power portfolio, as well as the 122MW Midway natural gas facility from Starwood Energy Group Global. CalPeak is jointly owned by Starwood and credit investor GSO Capital Partners and comprises four facilities across the ‘Golden State’ totaling 198MW. Carlyle did not reveal the cost of either transaction.

Robert Mancini, a Carlyle managing director and chairman of the board of Cogentrix, called Red Oak “attractive” for its “stable cash flow”. Cogentrix is a 30-year-old US plant operator and developer. Carlyle in 2012 bought Charlotte, North Carolina-headquartered Cogentrix from Goldman Sachs Group.

Since being acquired by Carlyle, Cogentrix has committed $600 million of equity capital to power asset deals, according to Carlyle. Carlyle managed account Carlyle Power Opportunities Capital Partners and the $1.2 billion Carlyle Infrastructure Partners fund provided equity for each acquisition, according to the firm.

ECP took possession of Red Oak in early 2012 from AES Corporation. AES in a report said its sale of Red Oak, combined with a separate sale of another plant, earned $230 million. Midway marked an early acquisition for the Starwood Energy Infrastructure Fund, which closed in 2008. CalPeak is majority owned by Starwood.

Neither Energy Capital nor GSO, through its owner The Blackstone Group, responded to separate requests for comment. Starwood in a statement called CalPeak and Midway long-term assets that represented good investments.