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Business North - The Daily Briefing - Business Newspaper Online
Capstan Corp. to sell Energy Systems Co. unit in Omaha
PHOTO: Todd Johnson
Energy Systems Company (ESC) of Omaha, Neb., a unit of the Duluth-based holding company Capstan Corp., has entered into an agreement to be acquired by NRG Yield, Inc. (NYSE: NYLD), a division of NRG Energy created by a July initial public offering.
ECS, an award-winning centralized supplier of heating and cooling services throughout a large district in Omaha, will be sold for $120 million in cash when the deal closes. NRG Yield anticipates the deal to conclude by the end of 2013.
“As just the second owner in ESC’s 45-year history, we have long been committed to providing reliable district energy service to our many customers in downtown Omaha,” Todd Johnson, ESC’s chairman and CEO, said in a news release. “It was important to us that the new owner be a stable, well-respected company like NRG that would honor that tradition of operational excellence. We are confident that it is an exceptional fit for both parties.”
Because NRG Yield is a publicly traded firm, federal regulations prevent parties to the deal from commenting beyond their statements in the news release.
ESC currently serves nearly 14 million square feet of data center, commercial, educational, hospital, cultural and governmental space in Omaha with a remaining life of customer contracts exceeding 11 years. NRG Yield said the Omaha system is known as one of the premier assets in the U.S. district energy industry and has been recognized as a “System of the Year” by the International District Energy Association (IDEA) – one of only 15 such systems (out of more than 700 in the United States) that has received the award.
NRG Yield intends to fund the purchase price using cash on hand and expects the acquisition to increase cash available for distribution by approximately $8 million in 2014. The assets will be acquired debt-free.
“The acquisition of ESC demonstrates NRG Yield’s ability to successfully compete for attractive contracted energy assets available from third parties,” David Crane, NRG Yield’s chairman and CEO, said in a news release. “In addition to contributing to our objective of sustainable and visible dividend growth for our investors, ESC provides us another important opportunity to supply the energy needs of business and other institutional customers directly and in a manner that is not entirely grid dependent.”
NRG Yield – which owns a diversified portfolio that includes fossil fuel, solar and wind power generation facilities – said the acquired firm will immediately be accretive to 2014 cash flow available for distribution per share by approximately 8 percent.
Capstan Corp. companies include the AtWater Group, Viant Crane, Fraser Industries, Lake Assault Boats, Northern Engineering Co., Building Logic and RJS Construction Group.
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