Quantum to Acquire Cogentrix Energy for $3B

Quantum Capital Group and its affiliates are acquiring Cogentrix Energy, a U.S. independent power producer, from funds managed by Carlyle for a total consideration of approximately $3 billion.

The Cogentrix platform is comprised of 5.3 gigawatts of efficient and flexible natural gas-fired power plants, located throughout PJM, ERCOT, and ISO-NE, which support the reliability, resiliency, and affordability of the U.S. electricity market, Carlyle said in a news release.

Headquartered in Charlotte, North Carolina, Cogentrix has a multi-decade track record of successfully acquiring, developing, constructing, operating, and optimizing conventional and renewable power generation assets throughout the USA, according to the release.

The transaction is subject to customary regulatory approvals and is expected to close between the fourth quarter of 2024 and the first quarter of 2025.

“We are at a critical juncture in the evolution of the domestic power market. Electricity demand is rapidly increasing thanks to explosive growth in data centers and AI [artificial intelligence], the reshoring of manufacturing, and the electrification-of-everything,” said Wil VanLoh, Founder and CEO of Quantum. “This growth is occurring at the same time our grid is becoming more unstable with additions of intermittent renewable power and continued retirements of coal-fired generation. Now more than ever, we need reliable and efficient power infrastructure. This is what the Cogentrix assets provide”.

Michael MacDougall, Partner at Quantum, said, “We are thrilled to partner with the Cogentrix team. Having stewarded more than 18 gigawatts of assets over its 40+ year history, the Company is a proven leader in building, managing, and optimizing power generation assets of all technology types. We expect to meaningfully grow the Cogentrix platform, with a focus on gas-fired power generation, renewables, and battery storage. Our goal is to deliver clean, reliable, and affordable power to customers.”

“We are pleased to have supported Cogentrix’s efforts to establish decarbonization objectives for its fleet of natural gas-fired power generation assets while continuing to support grid reliability, a critical balance required to effectuate the energy transition,” Pooja Goyal, CIO of Global Infrastructure at Carlyle, said. “This successful transaction is a testament to the deep sector expertise of our energy and infrastructure platform at Carlyle. We look forward to continuing our investment activities in this rapidly growing area, including partnering with our management teams on growth opportunities and deploying capital in new investments”.

“We are grateful for Carlyle’s partnership, which has provided us with the tools and capabilities to capture a growing opportunity set within the U.S. power market,” Cogentrix CEO John Ragan said. “As we look to the future, we are confident Quantum’s deep knowledge of the energy markets, successful track record of business building, and risk management capabilities will drive significant long-term value for our customers, employees, investors, and other stakeholders.”

Following the completion of the transaction, the company will continue to be led by current CEO John Ragan and the existing Cogentrix management team, according to the release.

Founded in 1998, Quantum is a leading provider of private equity, credit, and venture capital to the global energy and energy transition industry, having managed together with its affiliates more than $27 billion in equity commitments since its inception, the release said.

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