Calpine to be acquired by Energy Capital-led consortium

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Calpine to be acquired by Energy Capital-led consortium

Calpine Corporation has announced that it has entered into a definitive agreement under which Energy Capital Partners (Energy Capital or ECP) along with a consortium of investors led by Access Industries and Canada Pension Plan Investment Board will acquire Calpine for US$15.25 per share in cash, or US$5.6 billion.

The transaction follows a competitive strategic review process and was unanimously approved by Calpine’s Board of Directors.

Frank Cassidy, Chairman of Calpine’s Board of Directors, said:

“We are very pleased to announce this proposed transaction and are confident it is in the best interests of our shareholders and stakeholders. This transaction is the result of an exhaustive review of strategic alternatives undertaken by our Board, with the assistance of outside advisors, to maximize shareholder value and unlock the company’s intrinsic value, while eliminating execution risk. We are confident that this is the best outcome of that review and look forward to shareholder approval.”

Thad Hill, President and Chief Executive Officer of Calpine, commented:

“We are excited to partner with Energy Capital, a leading private equity investment firm focused on North American energy infrastructure and power assets. With ECP, Calpine will be able to operate as it always has – executing on our strategic objectives of providing safe and reliable power and serving our retail and wholesale customers with differentiated products and services. We will also continue to strengthen our wholesale power generation footprint, while benefiting from ECP’s support, industry expertise and long-term investment horizon. In short, Calpine will continue to be the nation’s premier competitive power company.”

Tyler Reeder, a partner at Energy Capital Partners, stated:

“We look forward to joining forces with Calpine’s talented team as they continue executing their strategy. We see significant value in Calpine’s operational excellence and strong and stable cash flows and have been impressed by the Company’s exceptional leadership and talented employees. 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. Finally, we do not intend to make any changes to the Company’s financial policy or previously announced $2.7 billion deleveraging plan.”

Along with Energy Capital Partners, the investor consortium is led by Access Industries and Canada Pension Plan Investment Board. Calpine will maintain its corporate headquarters in Houston, Texas with the current management team expected to remain in place. The parties currently expect the transaction to close in the first quarter of 2018.

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

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