A consortium led by Energy Capital Partners has agreed to purchase natural gas power provider Calpine for $15.25 per share in cash, or about $5.6 billion, representing a 51% premium to Calpine's stock price before the first media reports of a deal. Access Industries and Canada Pension Plan Investment Board are among ECP's co-investors. The deal is the fifth largest buyout completed or announced in the US so far this year, per the PitchBook Platform, and reportedly gives Calpine an enterprise value of some $17 billion.
The transaction is also an increasingly rare one for a private equity firm in the country's energy production sector. Activity in the space has nearly evaporated over the past two years, with completed quarterly deal count declining from 35 in 2Q 2015 to a mere five last quarter, according to PitchBook data. And so far this quarter, investors have finalized just two deals with energy production companies in the US.
In the wider energy sector, the same trend has occurred on a much more accelerated timeline. Quarterly PE deal count in the US energy sector actually rose steadily throughout 2016, but it began to plummet at the start of this year. Investors sealed 115 transactions in the space during 4Q 2016, but that figure dropped all the way to 42 deals in 2Q, per PitchBook data.