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Energy Capital Partners-led group completes Calpine buyout

A consortium of investors led by an affiliate of Energy Capital Partners LLC, including Access Industries Inc. and Canada Pension Plan Investment Board has completed its $5.6 billion acquisition of Calpine Corp.

Per the merger deal, Calpine stockholders will receive an amount in cash equal to $15.25 per share of Calpine common stock prior to the seizure of Calpine common shares at the New York Stock Exchange on March 9. Earlier March 8, Calpine deregistered all unsold securities registered in its registration statements with the SEC. Calpine shares closed at $15.25 per unit on March 8.

Calpine, an owner of merchant power plants, agreed to sell itself to the consortium of investors in August 2017. The company owns more than 28,000 MW of nameplate generating capacity, largely natural gas-fired power plants. It has another 3,330 MW of capacity planned or under construction.

In connection with the merger, the Calpine board of directors ceased to operate. However, the top management remained intact and continue to work for Calpine, now a subsidiary of Volt Parent LP, an affiliate of Energy Capital Partners.

"We do not expect to make any changes to the way Calpine operates its business and intend to remain focused on providing the high level of service to which Calpine's wholesale and retail customers have become accustomed," said Tyler Reeder, a partner at Energy Capital Partners. "Finally, we do not intend to make any changes to the Company's financial policy or previously announced deleveraging plan."

Thad Miller will serve as executive vice chairman and continue as chief legal officer, Executive Vice President Zamir Rauf will remain CFO, and Executive Vice President Charlie Gates will continue as head of power operations. Andrew Novotny and Caleb Stephenson have been promoted to executive vice presidents to serve as co-heads of commercial operations, Calpine's wholesale trading and origination businesses. Bryan Kimzey has been promoted to senior vice president of finance and treasurer.

Jim Wood will continue as president of Calpine Energy Solutions. He has also been named president of Calpine Retail Holdings LLC, with overall responsibility for the operations of Calpine's retail subsidiaries Calpine Energy Solutions, Champion Energy Services and North American Power.

Calpine President and CEO Thad Hill, along with Reeder, Douglas Kimmelman, Andrew Singer, Andrew Gilbert and Donald Wagner, became voting directors of Calpine. Per the merger agreement, ECP exercised the right to nominate four voting directors; Access Industries nominated one voting director; and Canada Pension Plan Investment Board will name one director, subject to satisfaction of certain requisite conditions, according to a filing.

ECP appointed Miller, Reeder, Kimmelman, Singer and Gilbert as directors of Calpine. Access Industries appointed Donald Wagner.

Lazard served as financial adviser and White & Case LLP served as legal advisor to Calpine. Barclays Capital Inc. served as financial adviser and Latham & Watkins LLP served as legal adviser to Energy Capital Partners.