Calpine upsized corporate revolver to approximately $1.8 billion through June 2020
HOUSTON – Calpine Corporation closed acquisition of Noble Americas Energy Solutions, LLC, the nation’s largest independent supplier of power to commercial and industrial retail customers.
Noble Solutions currently serves commercial and industrial customers in 18 states nationwide, including California, Texas, the Mid-Atlantic and the Northeastern United States, where Calpine’s wholesale power generation fleet is primarily concentrated.
The organization will remain headquartered in San Diego under the leadership of Jim Wood, who will remain its President and report to Trey Griggs, Calpine’s Executive Vice President and Chief Commercial Officer.
“Noble Solutions has built an impressive retail platform serving sophisticated commercial and industrial customers, and we are excited to welcome their talented professionals into the Calpine family,” said Griggs.
Its name will be changed to Calpine Energy Solutions, LLC, pending state-level regulatory approval.
“The Noble Solutions team’s delivery of customized product offerings effectively manages customers’ complex energy needs. We look forward to working together to build on their track record of success and to further leverage Calpine’s complementary generation fleet to create tailored solutions for customers,” said Griggs.
Calpine purchased Noble Solutions for $800 million plus working capital. Through collateral optimization and synergies and the runoff of acquired legacy hedges, Calpine expects net cash deployed (including working capital) of approximately $900 million by year-end 2016, declining to approximately $700 million substantially within the first year.
“Today, we are thrilled to join the Calpine team. Our customers will continue to receive the highest level of service that is the standard at Noble Solutions. With Calpine, our retail platform is now backed by a clean, modern and flexible generation fleet and a strong balance sheet that will allow us to provide greater value-added products and services,” said Wood.
The acquisition was funded with a combination of cash on hand and a one-year, $550 million term loan priced at LIBOR plus 175 basis points.
The company intends to repay the term loan during 2017 with proceeds from announced asset sales and cash from operations, including that generated from the anticipated collateral synergies.
Concurrent with the closing of the Noble Solutions acquisition, Calpine has upsized its corporate revolver to approximately $1.8 billion through June 2020.