Texas Genco
Encyclopedia
Texas Genco is a major power generation firm, active in the deregulated Texas electricity market
and owns several major power plants in the Houston area that serve area power needs.
Seeking opportunities arising out of the deregulation of the electricity industry in Texas, in late 2004 four private equity firms—the Texas Pacific Group
, the Blackstone Group
, Kohlberg Kravis Roberts, and Hellman & Friedman
of San Francisco—combined forces to purchase Texas Genco from the transmission & distribution provider utility Centerpoint Energy
for Houston.
This coalition of firms acquired Texas Genco—which was the second largest operator of power generation facilities in the state—for a price of approximately $1.9 billion and using just $900 million in cash.
In late 2005, these private equity firms announced the sale of Texas Genco to NRG Energy
of Princeton, N.J., for a price of roughly $5.9 billion. The investors achieved a gain of almost $5 billion over the space of an investment holding period of less than 18 months, a return that will mark one of the most lucrative private equity
investments in recent years.
Deregulation of the Texas Electricity Market
Electricity deregulation in Texas was the result of the coming into force of Texas Senate Bill 7 on January 1, 2002. According to the law, deregulation is to be phased in over several years....
and owns several major power plants in the Houston area that serve area power needs.
Seeking opportunities arising out of the deregulation of the electricity industry in Texas, in late 2004 four private equity firms—the Texas Pacific Group
Texas Pacific Group
TPG Capital is one of the largest private equity investment firms globally, focused on leveraged buyout, growth capital and leveraged recapitalization investments in distressed companies and turnaround situations. TPG also manages investment funds specializing in growth capital, venture capital,...
, the Blackstone Group
Blackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
, Kohlberg Kravis Roberts, and Hellman & Friedman
Hellman & Friedman
Hellman & Friedman is a private equity firm, founded in 1984 by Warren Hellman and Tully Friedman, that makes investments primarily through leveraged buyouts and minority growth capital investments....
of San Francisco—combined forces to purchase Texas Genco from the transmission & distribution provider utility Centerpoint Energy
CenterPoint Energy
CenterPoint Energy is a Fortune 500 electric and natural gas utility serving several markets in the U.S. states of Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. It was formerly known as Reliant Energy , NorAm Energy, Houston Industries, and HL&P...
for Houston.
This coalition of firms acquired Texas Genco—which was the second largest operator of power generation facilities in the state—for a price of approximately $1.9 billion and using just $900 million in cash.
In late 2005, these private equity firms announced the sale of Texas Genco to NRG Energy
NRG Energy
NRG Energy, Inc. is an American energy company headquartered in West Windsor Township, New Jersey, near Princeton.-Electrical Power Generation Operations:...
of Princeton, N.J., for a price of roughly $5.9 billion. The investors achieved a gain of almost $5 billion over the space of an investment holding period of less than 18 months, a return that will mark one of the most lucrative private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investments in recent years.
External links
- Deregulation of the Texas electricity marketDeregulation of the Texas Electricity MarketElectricity deregulation in Texas was the result of the coming into force of Texas Senate Bill 7 on January 1, 2002. According to the law, deregulation is to be phased in over several years....
- "The Deal That Even Awed Them in Houston," by Simon Romero, The New York Times