November 1, 2006
American Securities Closes Sale of Primary Energy Ventures
American Securities Capital Partners, LLC ("American Securities") announced today it has closed the sale of Primary Energy Ventures LLC ("Primary Energy"), a leading owner and operator of on-site combined heat and power and recycled energy projects, to EPCOR Power L.P. ("EPCOR"), for an acquisition price of approximately $380 million, including the assumption of lease obligations.
Primary Energy wholly owns eight facilities in the United States with an aggregate generation capacity of approximately 454 megawatts and 3.1 million lbs./hr of thermal energy, and owns a 15.4% equity interest in Primary Energy Recycling Holdings LLC ("PERH"). PERH wholly owns four energy facilities in the United States with an aggregate generation capacity of 284 megawatts and 1.9 million lbs./hr of thermal energy, and a 50% interest in a pulverized coal facility. The remaining 84.6% interest in PERH is held by Primary Energy Recycling Corporation ("PERC"), which trades on the Toronto Stock Exchange (TSX: PRI.UN). Primary Energy serves as Manager of PERC under a long-term Management Agreement. The combined value of Primary Energy and PERC is approximately $820 million.
American Securities first partnered with the Primary Energy management team in 2003 to acquire six operating subsidiaries from NiSource Inc., an Indiana public utility holding company. Since that time, American Securities has worked closely with Primary Energy to make additional acquisitions with a focus on recycled energy projects contracted to investment grade counterparties. "Since we began our partnership, American Securities and Primary Energy have successfully executed our strategy of acquiring profitable, well-positioned combined heat and power generation facilities." said Michael G. Fisch, President of American Securities. "Through our partnership we have purchased twelve power generation assets resulting in a very successful investment for our Primary Energy management partners and our investors. In addition, my American Securities colleagues and I have had the pleasure of working alongside one of the finest management teams in the recycled energy industry."
Recycled energy, which creates value from waste heat, provides both efficient and environmentally friendly energy. Primary Energy's management team and power generation facilities are among the leading energy recyclers in the United States. "When we partnered with American Securities, we forged a common vision for the expansion of our company," explained Thomas R. Casten, CEO of Primary Energy. "Our partners at American Securities supported us with their practical transaction experience, analytical expertise and enterprise management guidance. Together, we successfully assembled a portfolio of high quality recycled energy projects that help our customers reduce costs, fuel use and pollution. The sale to EPCOR provides Primary Energy an excellent new strategic partner."