Investors

Wayzata sells Texas plant for $625m

The Minnesota-based private equity firm is selling a 1,050MW power plant to independent power producer Calpine.

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Wayzata Investment Partners, a private equity firm based in Wayzata, Minnesota, has agreed to sell a 1,050 megawatt (MW) combined-cycle power plant to Calpine Corporation for $625 million, according to a statement issued by the Houston power company.

The natural gas-fired plant, located in Guadalupe County in Texas, is owned by MinnTex Power Holdings, a portfolio company owned by Wayzata Investment.

The transaction includes the acquisition of the Guadalupe plant and the 110-acre site which it occupies, but also “rights to an advanced development opportunity for an approximately 400-megawatt quick-start, natural gas-fired peaker, if market conditions warrant,” according to the statement.

“Guadalupe is an exceptional plant with an outstanding performance record that meets Calpine’s high standards for operational excellence,” Calpine chief executive Jack Fusco said. “We strongly believe in the potential of the Texas market as electric demand increases and reserve margins tighten.”

Calpine expects to close the transaction in the first quarter of 2014. The power company said it plans to fund the transaction with cash in hand.

MinnTex Power Holdings had bought the Guadalupe power plant in 2011 from PSEG Power LLC, a subsidiary of Public Service Enterprise Group, for approximately $351 million.

Founded in 2004, Wayzata Investment Partners specialises in purchasing distressed companies and assets with various strategies to profitably turn them around in partnership with new or existing management. Since then, the firm has organised three private equity funds through which it has raised more than $7 billion of committed capital.

In addition to its Wayzata headquarters, the private equity firm also has offices in Boston, Houston, London, Singapore, and Mumbai.

With 93 power plants either in operation or under construction, Calpine serves customers in 20 US states and Canada. The Houston-based company also specialises in developing, constructing, owning and operating natural gas-fired and renewable geothermal power plants.