Private Equity News & Analysis

Energy Capital in first exit to French utility

The US private equity firm has completed its first exit from its debut fund wit the sale of FirstLight for a reported value of $1.9bn. Energy Capital paid $1.34bn for FirstLight’s predecessor company in November 2006.

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Energy Capital Partners, an energy-focused Goldman Sachs spin-out, has sold portfolio company FirstLight Power Enterprises to SUEZ Energy North America, a subsidiary of French utility GDF SUEZ.

Industry sources quoted in Paris’ Le Figaro newspaper estimated that SUEZ paid $1.9 billion (€1.3 billion) for FirstLight.

A spokesperson for Energy Capital would not disclose the sale amount. However, he confirmed that the sale marks the firm’s first exit from its debut $2.25 billion fund, which it closed in January 2007.

In November 2006, Energy Capital made the fund’s first investment when it bought Northeast Generating Company and the Mount Tom generating station from Northeast Utilities, a provider of electricity to Connecticut, New Hampshire and western Massachusetts, for $1.34 billion.

In February of last year, Northeast rebranded as FirstLight, which now owns and operates a portfolio of 15 hydro, gas and coal power generation plants in Connecticut and Massachusetts with a combined capacity of 1,538 megawatts.

The purchaser, SUEZ Energy North America, already had a presence in the region via its ownership of liquid natural gas terminal operator Distrigas in Massachusetts. The deal will make the French-owned company the third-largest supplier of electricity to businesses in the US, Gerard Mestrallet, chairman of parent GDF SUEZ, told Le Figaro.

GDF SUEZ was formed in July after shareholders finally approved the merger of French state-controlled Gaz de France with Franco-Belgian utility SUEZ in a $100 billion deal. The combined entity reported pro forma North American revenues of €4.2 billion and €74.3 billion globally for fiscal year 2007.

Energy Capital invests in North American energy infrastructure, including power generation, renewables, electric transmission and midstream gas sectors.

Doug Kimmelman, Scott Helm and Thomas Lane, all Goldman Sachs alumni, founded the firm in May 2005. Previously, Kimmelman founded Goldman’s power investment group and Helm co-founded Goldman’s Orion Power Holdings. Lane was a senior mergers and acquisitions banker at Goldman.