By Houston Business Journal

Calpine Corp. has completed the acquisition of Conectiv Energy from Pepco Holdings Inc. for $1.63 billion after adjustments.

The acquisition includes Conectivâ¿¿s electric generation business consisting of 19 power plants, including one under construction, with a total generating capacity of 4,490 megawatts (MW) located in five Mid-Atlantic states in the PJM market.

⿿This acquisition marks an important strategic milestone for Calpine by allowing us to establish a critical foothold in PJM, one of the nation⿿s most robustly competitive power markets,⿝ said Jack Fusco, president and chief executive officer of Calpine. Approximately 200 former Conectiv employees, located primarily at plant sites and in engineering and other support functions, will join Calpine, which will set up a regional headquarters in Wilmington, Del.

Newark, Del.-based Conectiv Energy merged with Washington D.C.-based Pepco Holdings (NYSE: POM) in 2001.

The buy, originally announced in April, was funded by a combination of corporate cash and a $1.4 billion credit agreement entered into by New Development Holdings LLC, a wholly owned Calpine subsidiary. The agreement consists of a $1.3 billion amortizing, seven-year senior secured term facility and a $100 million, three-year senior secured revolving credit facility.

Copyright 2010 American City Business Journals
Copyright 2010