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ECP’s Tyler Reeder discusses comeback of natural gas power; Bain Capital buys into roadway maintenance

Good morning, Hubsters. Senior reporter Michael Schoeck here with the US edition of the Wire from the New York newsroom.

In a sign that PE dealmaking is on the rebound, Blackstone beat equity analysts' expectations for Q4 2024, and the firm's AUM rose to a record $1.13 trillion.

"Earnings growth accelerated sharply, while the key drivers of our business – inflows, investment activity and realizations – all reached their highest levels in two-and-a-half years," Blackstone CEO Steve Schwarzman said. "As we move forward in 2025, the firm is exhibiting significant momentum."

We’re opening the Wire today with an Inside the Exit story of mine about Energy Capital Partners’ exit of the largest US independent power producer for close to $27 billion.

Next we have two new business services deals to highlight involving roadway maintenance and fire safety providers being backed by Bain Capital, Altas and Leonard Green Partners.

And we’ll wrap up with a January update on companies for sale activity.

AI fuels new power demand

Energy Capital Partners’ $26.6 billion sale of independent power producer Calpine to Constellation Energy will create the largest clean energy provider in the US – capable of generating 60 gigawatts of power from nuclear, natural gas, hydro, solar and other renewable energy sources. It will also mark the largest private equity exit in the power and utility sector in two decades and one of the biggest transactions in the history of the energy industry. 

Announced January 10, the transaction is expected to close within a year, assuming it is approved by a slew of federal and state regulatory agencies in the US and Canada.

To learn more about the landmark deal – and what it signifies for M&A in the energy and power sector – PE Hub turned to several sources, including ECP president and managing partner Tyler Reeder. We also spoke with an investment banker who specializes in the power sector to discuss valuations and potential upcoming deals.

Upgrade to the premium version of the Wire to read the Inside the Exit story. 

Essential service roll-ups

Earlier this morning Bain Capital hit the road while Altas and Leonard Green portfolio company Pye-Barker entered Arkansas via an add-on.

Bainannounced the acquisition of Frontline Road Safety, a pavement marking services company, from the Sterling Group.  

Frontline, which is based in Denver, will continue to be led by long-time CEO Mitch Williams, while current management will remain invested in the company.  

In the second deal, Altas and Leonard Green-backed Pye-Barker announced the acquisition of Encore Technology Solutions, an Arkansas-based fire alarm systems provider, marking the buyer’s expansion into its 46th state. 

Upgrade to the premium version of the Wire for background on Pye-Barker’s recent sale.

Companies for sale

Companies for sale activity has remained slow for January.

Upgrade to the premium version of the Wire for intel on companies for sale.

If you’ve got tips on companies coming to the market, shoot me a note at michael.s.@pei.group.

That’s a wrap for me.  Keep an eye out for the Europe edition of the Wire tomorrow from Sophie Rose and the US edition from John R Fischer.

Cheers,

Michael

Read the full Wire commentary on PE Hub ...

Also of note (may require subscriptions)

Omni Partners will look for data-focused businesses for its govtech buy-and-build platform Infoshare (styled Infoshare+) to improve efficiency and generate additional revenue for the struggling UK public sector, partners Wayne Story and Elissa von Broembsen-Kluever told PE Hub.

Srini Nagarajan, managing director and head of Asia at British International Investment, told Agri Investor that the development finance institution of the UK has an aim of investing around £500 million ($618 million; €593 million) into climate finance by 2026, with at least 30 percent of those new commitments planned for Southeast Asia.

Yet another $1 billion-plus GP-led credit deal is being shopped around the secondaries market. TPG Angelo Gordon is running a continuation fund process for a credit portfolio, two sources told Secondaries Investor. The proposed transaction is understood to be over $1.5 billion in size. It is unclear what type of credit positions are included in the overall portfolio. 

DeepSeek shows that AI infra can’t escape tech risk: Until now, the prevailing narrative in the infrastructure market has been that a focus on investing in the ‘picks and shovels’ was the safest way to gain exposure to the AI revolution. But what happens if we need far fewer picks and shovels? Or just different ones? (Infrastructure Investor)

Evolution Credit Partners, a Boston-based alternative asset manager, held the first close of its Evolution Credit Opportunity Fund III, a North America-focused senior debt fund, at $465.3 million, Private Debt Investor has learned.

Apollo Global Management remains “quite bullish” on the future of US renewables despite the change in administration, according to Ewa Jackson, a managing director in the firm’s client and product solutions group. (New Private Markets)

Hg, Europe’s largest tech investor, is seeking to write checks of more than $1.25 billion with its latest large-cap software fund, documents prepared for a US public pension show. The London-headquartered software investor is seeking $12 billion for Saturn 4, according to materials prepared for the New Jersey Division of Investment‘s 29 January board meeting. (Private Equity International)

Nearly half of LPs and GPs consider their understanding of carbon credits and voluntary carbon markets to be below average or poor, according to a survey conducted by Initiative Climat International, an influential industry working group. (New Private Markets)

After ushering in private credit investments as a reaction to the pandemic’s economic dislocation, the Marin County Employees’ Retirement Association is welcoming a performance outpacing other portfolio assets. (Private Debt Investor)

Clifford Capital, an infrastructure credit financing platform backed by Singaporean sovereign wealth fund Temasek, is expanding into asset management. (Infrastructure Investor)

Deals

They said it

“Earnings growth accelerated sharply, while the key drivers of our business – inflows, investment activity and realizations – all reached their highest levels in two-and-a-half years.”

— Steve Schwarzman, chief executive officer of Blackstone, on the investor’s Q4 earnings.

Today's letter was prepared by Michael Schoeck

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