Canadian specialty finance firm Crown Capital Partners has launched a new fund to invest in integrated energy platforms (IEP) that supply electricity under long-term contracts to mid- to large-scale users, such as manufacturers, hotels and condominiums. Crown Capital Power LP has been initially capitalized with $15 million to back eight IEPs that can provide more reliable and less expensive electricity compared to a public utility. It will begin by targeting Ontario opportunities and over time expand into other North American markets. The fund’s first investment is with OOM Energy Group, a Toronto-based electricity generation company that has built, operated and maintained more than 40 IEPs.
Crown Capital Partners Launches Crown Capital Power LP
New fund will capitalize on demand for lower-cost, reliable electricity supply
Provides significant new market and growth opportunity for Crown
CALGARY, June 28, 2018 /CNW/ – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), which provides growth capital to successful mid-market companies, today announced the launch of Crown Capital Power LP (“Crown Power” or “the Fund”), a new fund managed by Crown that intends to provide investors with attractive, utility-like income through the direct ownership of Integrated Energy Platforms (“IEPs”) that provide electricity under long-term contracts to mid to large-scale electricity users, such as manufacturers, hotels, and condominiums. IEPs are on-site generators that provide more reliable and less expensive electricity than comparable service from a public utility.
“Over the past 10 years, commercial electricity users, especially in Ontario, have experienced substantial price increases and prices are expected to continue rising,” said Chris Johnson, President and CEO of Crown. “Because electricity is vital to businesses, and the rate increases have become so significant, there is growing demand for ‘private utility’ solutions. From an investment perspective, we see a tremendous opportunity to build a portfolio of long-term contracts with profitable, well-established businesses that will deliver investors attractive utility-like monthly recurring cash flows.”
The Fund’s primary initial target market will be Ontario, where electricity prices have nearly doubled over the past 10 years, far outpacing electricity price growth in North America. Over time, the Fund expects to target numerous other regions in North America that are experiencing similarly high electricity prices.
Crown Power will partner with experienced operators to manage the sales, installation and servicing of the IEPs. The Fund’s first operating partner is OOM Energy Group (“OOM”), a private electricity generation company that offers clients an alternative to the public utility grid. OOM provides its clients with reliable, uninterrupted power, essentially replacing the utility and removing the burden of managing energy supply, while providing significant savings. OOM and its principals have built, operated and maintained over 40 IEPs for industrial, commercial and institutional operations, ranging in size from 50 kWs to 40 MWs.
Mr. Johnson added: “As early entrants to this private utility market, the team at OOM has established a solid reputation and significant expertise in the deployment of IEPs, validating their ability to meet commercial customers’ energy needs with no downtime, while delivering material savings. We’re delighted to partner with OOM as they execute on signed contracts and continue to build a significant pipeline of new projects.”
Crown is initially committing $15.0 million of capital to Crown Power, which will be used to finance the near-term deployment of eight IEPs. Crown expects to utilize its hybrid business model to raise additional capital for Crown Power as needed.
About Crown Capital Partners
Crown (TSX:CRWN) is a specialty finance company focused on providing capital to successful Canadian and select U.S. companies. Crown also manages capital pools, including some in which Crown has a direct ownership interest. Crown originates, structures and provides tailored special situation and long-term financing solutions to a diversified group of private and public mid-market companies in the form of loans, royalties and other structures with minimal or no ownership dilution.
For further information: Craig Armitage, Investor Relations, firstname.lastname@example.org, (416) 347-8954