The Carlyle Group (NASDAQ:CG) is exploring the sale of Cogentrix Energy, the Financial Times reported. The investment firm acquired Cogentrix, one of the largest electric utility companies in the U.S., from financial services giant Goldman Sachs (NYSE:GS) in 2012.
Per the report, the private equity company capital group has engaged advisers, including investment bank Lazard and law firm Latham & Watkins, to explore a sale. Further, initial estimates suggest that the potential sale could value Cogentrix Energy between $3 billion and $4 billion.
Carlyle to Gain Significantly
The move could deliver substantial returns for Carlyle’s infrastructure arm, underscoring its strategic portfolio management approach amid evolving market dynamics.
It’s worth noting that power plants have become significantly more attractive investment targets. This is due to the expected increase in electricity consumption linked to data centers and digital infrastructure powering technologies such as artificial intelligence (AI).
Cogentrix owns stakes in 13 natural gas power plants across the U.S., and the power producer has roughly doubled its assets since 2012, making it an attractive investment target.
Is Carlyle Group a Good Stock to Buy?
The Carlyle Group’s total assets under management (AUM) grew by 12% year-over-year to reach $425 billion in Q1. Additionally, its fee-earning AUM saw a 12% year-over-year increase. CG stock has appreciated by more than 29% over the past year. Meanwhile, analysts on Wall Street are cautiously optimistic about its future prospects.
It has six Buys, five Holds, and one Sell recommendation for a Moderate Buy consensus rating. The analysts’ price target on CG stock is $49.58, implying 26.97% upside potential from current levels.
