Quantum Capital Group to acquire Cogentrix Energy from Carlyle Group for $3bn

Quantum Capital Group, a prominent investment firm, has announced it will acquire Cogentrix Energy, a major U.S. independent power producer, from funds managed by Carlyle Group for approximately $3 billion. The acquisition includes Cogentrix’s extensive portfolio of natural gas-fired power plants, which collectively provide 5.3 gigawatts of reliable energy across key U.S. markets.

Cogentrix’s Power Generation Assets

Cogentrix Energy, headquartered in Charlotte, North Carolina, operates a network of efficient and flexible natural gas-fired power plants. These facilities are strategically located across the PJM Interconnection, the Electric Reliability Council of Texas (ERCOT), and ISO New England (ISO-NE) regions, playing a crucial role in maintaining the reliability and affordability of the U.S. electricity grid.

Leadership Continuity

Following the transaction’s completion, which is anticipated between the fourth quarter of 2024 and the first quarter of 2025, Cogentrix will continue to be managed by its current leadership team, including CEO John Ragan. This continuity is expected to ensure a smooth transition and sustained operational excellence.

Strategic Importance of the Acquisition

Wil VanLoh, Founder and CEO of Quantum Capital Group, emphasized the strategic timing of this acquisition. He highlighted the increasing electricity demand driven by growth in data centres, artificial intelligence, and manufacturing reshoring. Concurrently, the U.S. grid faces challenges from intermittent renewable energy sources and the retirement of coal-fired plants. VanLoh underscored the need for dependable and efficient power infrastructure, which Cogentrix’s assets are well-positioned to provide.

Quantum’s Vision for Cogentrix

Michael MacDougall, Partner at Quantum Capital Group, expressed enthusiasm for collaborating with Cogentrix’s team. MacDougall noted the company’s impressive history of managing over 18 gigawatts of power assets and outlined Quantum’s plans to expand Cogentrix’s capabilities in gas-fired power generation, renewables, and battery storage. The goal is to enhance the delivery of clean, reliable, and affordable power to customers.

Carlyle’s Perspective on the Deal

Matt O’Connor, Partner at Carlyle Group’s Global Infrastructure team, described the transaction as a positive development for all parties. He praised Cogentrix’s transformation under Carlyle’s ownership and expressed confidence in its future growth with Quantum. Pooja Goyal, CIO of Carlyle’s Global Infrastructure, commended the successful achievement of Cogentrix’s decarbonisation objectives and its contribution to grid reliability.

Advisors for the Transaction

Guggenheim served as Quantum’s financial advisor, while King & Spalding and Vinson & Elkins provided legal counsel. Lazard acted as Carlyle’s financial advisor, and Latham & Watkins offered legal advice.

About Cogentrix Energy

Founded in 1983, Cogentrix Energy is a leading independent power producer known for its successful track record in acquiring, developing, and operating power generation assets across the United States. The company has been instrumental in advancing the U.S. energy sector with its comprehensive portfolio of conventional and renewable power assets.