Ironclad Energy Ventures LLC on Sept. 22 announced the formation of Ironclad Energy Partners and the acquisition of RED Investment LLC and its portfolio of four U.S. cogeneration and power facilities.
Led by power industry veterans John Prunkl and Christopher Fanella, Ironclad Energy Partners is a joint investment vehicle formed with Stonepeak Infrastructure Partners to acquire, develop, own and operate middle-market power generation facilities and utilities across North America.
Ironclad’s first acquisition is RED Investment, owner of four cogeneration and power facilities located in New York, New Jersey, Massachusetts, and California. The largest of the four wholly-owned assets is the utility and power infrastructure (called “RED Rochester”) serving the Eastman Business Park (EBP) in Rochester, New York. EBP is a 1,200-acre business park serving more than 70 industrial and commercial customers, including Eastman Kodak Co.
“We are proud to partner with Ironclad and take this important first step in building a platform of power generation facilities and utility operations,” said Luke Taylor, Senior Managing Director of Stonepeak. “We look forward to working closely with the management team of Ironclad in this first investment and to making additional acquisitions.”
RED Rochester is a utility franchise that includes a tri-generation power plant providing electricity, steam, and refrigeration for use by its customers within EBP. At this point, RED Rochester is powered by three coal-fired boilers and includes assets used to generate, collect, treat, and/or distribute, power, multiple pressures of steam, compressed air, demineralized water, natural gas, high-purity water, nitrogen, 9º calcium chloride brine, chilled water, industrial water, potable water, fire water and industrial wastewater.
With the close of the RED Investment acquisition, Ironclad is committing additional capital to replace the coal-fired powerhouse with a clean-burning natural gas fueled cogeneration facility.
“With the conversion from coal to gas, RED Rochester will have a clean and efficient facility that will reliably and economically serve EBP customers for the foreseeable future,” said John Prunkl, CEO of Ironclad. “Work has already begun on the conversion and should be complete with four new natural gas boilers coming on-line by Q1, 2018. The conversion significantly reduces greenhouse gas emissions, which will benefit the Rochester area as well as New York State.”
RED Rochester currently supplies utility services to Kodak, twelve independent business customers, and the remainder of the independent businesses in EBP that rent space from Kodak or the other building owners within EBP. There are approximately 6,500 employees on site at the park.
Said Christopher Fanella, President and CFO of Ironclad: “RED Rochester provides an array of utility services that can’t be found at any other industrial park in the US. We look forward to playing a vital role in helping our current customers grow while bringing new, vibrant manufacturing companies to the Rochester area and specifically into EBP.”
The New York State Public Service Commission issued an Aug. 2 order approving this transaction.
Recycled Energy Development separately announced Sept. 22 that it has completed the sale of RED Investment, a 121-MW, 1 million+ MMBtu tri-generation portfolio to Ironclad Energy Partners. Terms of the transaction were not disclosed.
Under the leadership of RED Chairman Tom Casten and RED CEO Sean Casten, RED Investment developed, constructed, acquired and operated four co-generation facilities located in New York, New Jersey, Massachusetts and California. The largest of these assets is the RED-Rochester utility and power infrastructure serving the Eastman Business Park. RED Investment’s other assets include: RED-Burlington, an integrated cogeneration plant serving a wallboard manufacturer in New Jersey; RED-COI, an integrated cogeneration plant serving a dairy in California; and RED-Franklin, an integrated cogeneration plant serving a dairy in Massachusetts. Ironclad will assume management of RED’s assets and employees.
RED acquired the Rochester assets from Eastman Kodak in 2013 and has invested more than $30 million in a range of energy efficiency, safety/reliability and modernization projects, including the initiation of the conversion of 40+ year old coal-fired assets to cleaner, more efficient natural gas.
“Ironclad brings the capital and expertise necessary to carry on the legacy we began at EBP Utilities,” said RED CEO Sean Casten. “There is a vibrant and diverse set of businesses in the Eastman Business Park but the recent history of the park made traditional financing of the coal-to-gas conversion quite difficult. Ironclad’s financial capacity, coupled with their rich experience providing mission-critical, ‘inside-the-fence’ utility services to complex manufacturing operations makes them an ideal partner for this next stage of the EBP’s growth. Our customers and colleagues are lucky to have such experienced operators.”
Recycled Energy Development develops, owns, and operates power projects that harness waste energy and dramatically reduce greenhouse gas emissions and power costs. With more than 30 years’ experience undertaking environmentally responsible energy development projects, RED’s team works closely with industrial companies to optimize energy efficiency and maximize profits.
Ironclad Energy Partners is a new joint venture between Stonepeak and Ironclad Energy Ventures. Prunkl and Fanella co-founded Ironclad in early 2016 for the purpose of acquiring, developing, owning, operating, and making capital investments in middle-market energy facilities. Formerly CEO and CCO of Primary Energy Recycling Corp., a TSX-traded company, the Ironclad principals have acquired, owned, partnered, operated, and/or constructed projects in the U.S. and around the world totaling more than 11,000 MW of capacity.
Stonepeak is a North America-focused private equity firm with headquarters in New York. Stonepeak invests in businesses comprised of hard assets with leading market positions primarily in the following sectors: Energy, Power and Renewables, Transportation, Utilities, Water, and Communications. Stonepeak manages approximately $6 billion of capital for its investors.
Contact information is: President and Chief Financial Officer, Christopher Fanella, email@example.com, (630) 292-3893.