Carlyle/Riverstone in $430m power plant buy

The private equity group has partnered with publicly traded Sempra Energy to buy 10 power plants across Texas.

Carlyle/Riverstone, the energy investment partnership between The Carlyle Group and Riverstone Holdings, has teamed with a unit of publicly traded energy services holding company Sempra Energy in the acquisition of 10 Texas power plants from American Electric Power for $430 million (€348 million).


The main asset to be acquired is a 632-megawatt, coal-fired power plant in Goliad County, Texas. The total wattage represented in the transaction as much as 3,813 megawatts.


Carlyle/Riverstone and Sempra Energy Partners, a division of San Diego-based Sempra, are equal partners on the deal, according to a press release. Sempra Energy Partners was created last year to invest in the distressed energy market. The agreement also includes the acquisition of four inactive power plants. The Sempra investment unit will also provide management services for the power plants.


In the release, Sempra stated its equity investment at less than $100 million.


Riverstone’s Michael Hoffman led the deal for the firm.


Carlyle/Riverstone, with $1.2 billion in capital, was formed in 2000 to pursue energy investments. A recent deal for the group was in March, when it partnered with Acon Investments on the acquisition of exploration company Mariner Energy from bankrupt Enron for $271.1 million.


US power plants have drawn considerable interest from private equity firms recently because of their consistent cash flow and typically distressed parent companies.