US-based investment firm Platinum Equity has signed a definitive agreement with GenOn Energy to acquire the Hunterstown power generation facility and related assets for approximately $520m.
Located in Gettysburg, Pennsylvania, GenOn’s combined-cycle gas turbine generating power plant has an 810MW capacity, which is supplied to the PJM (Met-Ed) 500kV power grid.
Electricity supplied to the PJM power grid is said to be enough to provide electricity to more than 648,000 homes.
Part of FirstEnergy, PJM is a regional transmission organisation that manages the movement of wholesale electricity in 13 states in the US, as well as the District of Columbia.
The deal is expected to close in Q2 of this year after obtaining all regulatory approvals from concerned authorities.
NRG Energy acquired GenOn on 14 December 2012. In June last year, GenOn filed for bankruptcy protection.
Platinum Equity partner Louis Samson said: “The power generation industry continues to experience some dislocation, which is fuelling corporate carve-out activity.
“Hunterstown is well maintained and features industry-leading technology. It operates in PJM, the largest electricity market in the US, and generates strong recurring revenue streams.
“We believe that the dynamics prevailing in this sector will continue to create attractive opportunities for us to acquire assets and create value.”
The acquisition of Hunterstown power generation facility is said to be in line with Platinum Equity’s mergers, acquisitions and operations (M&A&O) strategy.
Platinum Equity is actively looking for add-on opportunities for the Hunterstown asset and additional platform investments in the power generation market.
For the acquisition, AOS Energy Partners provided consulting services to Platinum Equity and also co-invested in the transaction.
AOS intends to play an active role in the acquired business.
Latham & Watkins served as a legal counsel to Platinum Equity for Hunterstown acquisition, while the financing was led by Morgan Stanley.