Diamond Castle exits wind energy company in $320m deal

The DLJ spin-out has sold its 100 percent holding in Catamount Energy after purchasing the company for $76m in 2005. Catamount operates a 300-megawatt wind farm in Texas and holds 1,750-megawatts in developmental interests in the UK and US.

New York-based private equity firm Diamond Castle Holdings has sold its 100 percent stake in wind energy producer Catamount Energy to Duke Energy for $240 million (€152.6 million) in equity plus the assumption of roughly $80 million in debt.

The deal is expected to close in the fourth quarter of 2008.

Diamond Castle originally purchased Catamount from Central Vermont Public Service, Vermont's largest electric utility, for $76 million in the fourth quarter of 2005.

Catamount Energy, formed in 1992 has historically invested in a diverse mix of renewable energy projects including wind, hydroelectric, wood waste and natural gas. In 2001, the company shifted its focus to become a developer, owner and operator of wind energy projects.

Catamount has approximately 300 megawatts of wind energy in operation including the Sweetwater project in Texas, one of the largest wind projects in the world. The company also has about 1,750 megawatts of development interests in the US and the UK.

This is the second wind energy acquisition for Duke Energy Generation Services, a unit of Charlotte, North Carolina-headquartered electric power company Duke Energy. The company purchased Texas-based wind developer Tierra Energy in May 2007.

Diamond Castle closed its first fund on $1.85 billion in December 2006, two years after it was founded by former DLJ Merchant Banking Partners head Lawrence Schloss. In January, Diamond Castle portfolio company PRC filed Chapter 11 bankruptcy, just over a year after the DLJ spinout acquired the company for an undisclosed sum. According to the filing, PRC owed between $100 million and $500 million.