C. The Purchaser and Seller
of the 50% Interest in LGS
As noted above, the proposed seller in this transaction is Western Hub. It is a Delaware limited liability company with its principal place of business in Houston, Texas. The application states that Western Hub "is owned principally by three entities" - Haddington/Chase Energy Partners (WHP) L.L.C., a Delaware limited liability company, and two Delaware limited partnerships, Haddington Energy Partners LP and Haddington Energy Partners II LP. As noted in D.03-02-071, Western Hub is the manager of LGS's parent, Lodi Holdings.4
The proposed purchaser in this transaction is WHP Acquisition II, also a Delaware limited liability company. It was formed for the specific purpose of acquiring Western Hub's ownership interest in Lodi Holdings -- for which it proposes to pay $125 million -- and its principal place of business is Boston, Massachusetts. WHP Acquisition II is wholly owned by ArcLight Fund II, which, as noted in the summary, is a private equity fund formed to invest in the power and energy industries. The joint applicants state that ArcLight Fund II has $1.6 billion in committed capital from its investors and currently owns a variety of energy investments, including approximately 350 megawatts of net generation qualifying facilities (QFs) located mainly in Bakersfield, California. (Id. at 4.)
4 On the question of who will manage LGS if the proposed transfer is approved, the application states:
"Because Western Hub will no longer have any ownership interest, all operating and management functions will be transitioned to [Lodi Holdings.] The existing management team is expected to transition to [Lodi Holdings] or will be replaced by individuals with similar qualifications and experience." (Id. at 6.)
