United States

United States

Investment giant buys wind company -- Enter Goldman Sachs

US investment banking firm Goldman Sachs will buy Zilkha Renewable Energy effective by mid-year, pending regulatory approvals. The price is not disclosed. The transaction will infuse Zilkha with the financial resources to expand its scale and scope of efforts, according to the company. "The wind industry is rapidly developing into a market in which success depends on the integration of development, construction, and operations with finance and ownership," says Zilkha.

xThe company has nearly 4000 MW of wind projects in various stages of development in 12 states, including the 200 MW Flat Rock Wind Power Project in Lewis County, New York, and the 150 MW Blue Canyon Phase II Project in Oklahoma. Both projects are scheduled for completion this year.

xxChairman comments

xIn announcing the strategic purchase, Goldman Sachs says it will add to the company's coal and gas plant portfolio and position the firm to participate in the US wind market. It already has interests in wind farms in Wyoming, Oregon and California.

x"Goldman Sachs believes that wind and other renewable forms of energy will become an increasingly important part of the world's energy mix," says Henry M Paulson Jr, Goldman Sachs' chairman and chief executive officer, in a notable personal comment to such a relatively small deal for the company. "This acquisition will allow us to leverage Zilkha's strength in wind energy development with Goldman's expertise and market leadership in energy finance and power marketing."

xxSecond investment

xGoldman Sachs has no plans for additional acquisitions in the wind industry "at this time," says spokesman Michael DuVally. The company, however, is also taking a stake in ailing German wind turbine manufacturer Nordex (page 32). There is apparently no direct link with the Zilkha deal. "We expect the Zilkha team to make decision about turbines based on economics and suitability, much as they have in the past," says DuVally, who declines to comment further on the investment in Nordex.

xZilkha Renewable Energy, headquartered in Houston, Texas, was founded six years ago by Selim Zilkha (founder of the European Mothercare store chain) and his son Michael. After the sale to Goldman Sachs is complete, Michael Zilkha will participate on the board of directors. No staff changes are anticipated. "Goldman Sachs' acquisition of Zilkha is a clear sign of wind's emergence as competitive, efficient and mainstream energy source," says Michael Zilkha.

xFounded in 1869, Goldman Sachs is one of the oldest and largest investment banking firms, providing a wide range of services worldwide to clients including corporations, financial institutions, governments, and high net worth individuals. The firm is headquartered in New York.

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