Macquarie Infrastructure Company (MIC) has entered into a definitive agreement to acquire Bayonne Energy Center (BEC) from an affiliate of ArcLight Capital Partners LLC.
The transaction will be closed for approximately US$210 million in cash plus the assumption of approximately US$510 million of debt maturing in 2021 resulting in a total enterprise value of $720 million. Barclays served as financial advisor to MIC.
BEC includes both a 512 megawatt gas-fired power generation facility located adjacent to MIC’s International-Matex Tank Terminals (IMTT) operations in Bayonne, New Jersey (USA) and a 7-mile long transmission cable running beneath the Hudson River connecting the plant to the Consolidated Edison Gowanus substation. The power produced by BEC is used to meet electricity demand in the New York City market.
62.5% of the energy and capacity at BEC is sold subject to tolling agreements with Centrica/Direct Energy (A3/A-) having an average remaining life of 13 years (including available extension options).
MIC expects BEC to generate EBITDA of approximately US$62 million on an annualized basis. Together with the company’s recently announced acquisition of an increased stake in Idaho Wind Partners, MIC expects its Contracted Power & Energy (CP&E) segment to generate approximately 15% of total EBITDA in 2015.
James Hooke, chief executive officer of MIC, stated.
“We’re pleased to diversify and strengthen our CP&E segment with the acquisition of the Bayonne Energy Center. Given its proximity to IMTT-Bayonne, we are familiar with BEC – it is an exceptional business to add to our growing CP&E portfolio.”
“The BEC acquisition, combined with our December acquisition of an additional stake in IWP, makes our CP&E segment a more substantial fourth vertical. Including BEC we will own just under 800MW of generating capacity. The majority of the generating capacity is subject to offtake agreements with investment-grade counterparties for an average of more than 15 years. Including the additional development at BEC, we have a pipeline of opportunities that could see us own more than 1GW of generating capacity in the medium term.”