Starwood Energy to acquire natural gas portfolio

An affiliate of the private equity firm will acquire Lakeside Generation, a 369MW portfolio of three natural gas facilities.

An affiliate of Starwood Energy Global Group, a private investment firm focused on energy infrastructure, will acquire Lakeside Generation, a 369-megawatt (MW) portfolio of three natural gas facilities in New York and Pennsylvania, the Connecticut firm said in a statement. Financial details of the transaction were not disclosed.

The portfolio to be acquired comprises a 158MW peaking facility in Hazleton, Pennsylvania; a 103MW combined cycle facility in Syracuse, New York; and a 108MW cogeneration combined cycle facility in Beaver Falls, also in New York.

The Hazleton facility sells capacity and energy to PJM, the regional transmission organisation that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. The New York plants – Syracuse and Beaver Falls – sell capacity and energy to the New York Independent System Operator (NYISO), a not-for-profit corporation responsible for operating the state’s bulk electricity grid.

The transaction, which is subject to customary conditions and regulatory approvals, is expected to close in the first quarter of 2015.

Lakeside Energy, an owner and operator of power generation facilities in North America, acquired the Hazleton facility in March 2008 from an affiliate of Williams Company. The Syracuse and Beaver Falls plants were acquired four years later in November 2012 from Intergys Energy Services. The Illinois-based energy company has the backing of American Securities, a middle market private equity firm.

Headquartered in Greenwich, Connecticut, Starwood Energy is an affiliate of private real estate investment firm Starwood Capital Group. The energy-focused firm invests primarily in natural gas, renewable electricity generation and power transmission with equity investments typically ranging from $25 million to $100 million or more.

Starwood Energy has raised two general opportunity funds. Most recently, it closed Starwood Energy Infrastructure Fund II (SEIF II) on $983 million in January, beating its initial target of $750 million. SEIF II will target renewable energy assets in North America.

Its predecessor, Starwood Energy Infrastructure Fund I held its final close on total commitments of $483 million. The fund has invested in projects such as the Hudson Transmission Project, a 600MW transmission line in New Jersey; the 69MW Starwood SSM Project, a solar photovoltaic plant in Ontario, Canada; the Starwood Midway, a 120MW simple-cycle peaking plant in California; and the 272MW Thermo Facility combined-cycle power plant in Denver, Colorado.

Through these two funds and other affiliated investment vehicles, Starwood Energy manages total equity commitments of more than $2 billion and has executed transactions totalling more than $4 billion in enterprise value.