US Power Generating Company Enters into Merger Agreement

NEW YORK--()--US Power Generating Company (USPG) today announced that it has entered into a definitive agreement and plan of merger with Tenaska Capital Management, LLC affiliates (TCM). Pursuant to the terms of the agreement, USPG will become a wholly-owned indirect subsidiary of TCM. Under the terms of the merger, TCM will purchase USPG, with the final price being determined by a number of business and tax adjustments. USPG’s debt was upsized by $125 million in conjunction with the merger.

“We are pleased to enter into this transaction with Tenaska Capital Management,” said Mark Sudbey, chief executive officer of USPG. “Tenaska is a proven industry leader and this transaction creates a new future for our business and employees.”

“Acquiring US Power Generating Company provides TCM a strong entry into the New York market,” said Dan Lonergan, senior managing director of TCM. “The USPG management and operating organizations bring a depth of expertise, which complements Tenaska’s own record in the industry. We look forward to working with them.”

Consummation of the merger is subject to customary conditions including approvals of the Federal Energy Regulatory Commission and the New York Public Service Commission, as well as expiration of the waiting period regarding the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Goldman, Sachs & Co. and Morgan Stanley & Co. LLC acted as financial advisors, and Latham & Watkins LLP as legal counsel, to USPG on the merger transaction. Goldman Sachs Lending Partners LLC, Morgan Stanley Senior Lending Fund and Deutsche Bank Securities Inc. were engaged to arrange, and Kirkland & Ellis, LLP advised USPG, on the debt upsize transaction.

About US Power Generating Company

USPG owns and operates 53 generating units at three facilities with a total summer capacity of over 2,180 Megawatts (“MW”). The Company sells energy and capacity into the NYISO deregulated market and represents generation sufficient to serve approximately 20 percent of the overall load in New York City.

About Tenaska Capital Management, LLC

Tenaska Capital Management, LLC (TCM), an affiliate of Omaha, Neb.-based Tenaska, is a leading manager of energy private equity investments. TCM has approximately $3.5 billion in assets under management and targets investments in power generation, oil and natural gas midstream and energy services. To learn more about TCM or Tenaska, visit www.tenaskacapital.com or www.tenaska.com.

Contacts

US Power Generating Company:
Ted Babcock, 212-792-0828
Senior Vice President Investor Relations and Treasurer
tbabcock@uspowergen.com
or
John Reese, 212-792-0897
Senior Vice President
jreese@uspowergen.com
or
Sloane & Company
Josh Hochberg, 212-446-1892
jhochberg@sloanepr.com
or
Tenaska Capital Management:
Delette Olberg, 402-691-9595
Vice President, Government and Public Affairs

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Contacts

US Power Generating Company:
Ted Babcock, 212-792-0828
Senior Vice President Investor Relations and Treasurer
tbabcock@uspowergen.com
or
John Reese, 212-792-0897
Senior Vice President
jreese@uspowergen.com
or
Sloane & Company
Josh Hochberg, 212-446-1892
jhochberg@sloanepr.com
or
Tenaska Capital Management:
Delette Olberg, 402-691-9595
Vice President, Government and Public Affairs