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Goldman Sachs bets on high price for wind energy subsidiary

Goldman Sachs is putting its Horizon Wind Energy subsidiary up for sale, in a bet that the market for renewable energy is nearing a top.

According to energy news Web site Sparkspread.com, which first reported the sale, Goldman might get around $1.5 billion for the Houston, Tex.-based company. The firm bought Horizon – which was then known as Zilkha Renewable Energy – last year for an undisclosed amount.

To get that pile of cash, Goldman is making some gale force assumptions about Horizon, a sales memorandum obtained by The Post shows.

Goldman is pitching the company as possibly being able to throw off $800 million in adjusted earnings before interest, taxes, depreciation and amortization by 2011. A more traditional financial valuation, Ebitda, is expected to come in at around $400 million by then.

To get that cash flow from wind energy, Goldman is assuming that Horizon will control 14 percent of all wind generation developed in the U.S. since 2000. Those figures also assume that 2,100 megawatts of additional generation capacity is added by 2010.

Goldman is also telling prospective buyers that legislation might blow their way.

“National greenhouse gas legislation, widely expected to be adopted in the next five years, would improve the cost competitiveness of renewable energy,” the sales document said.

Better still, as the “exclusive financial adviser” for Horizon, Goldman’s merger department is slated for a handsome multi-million dollar payday.

To be fair, Goldman is selling into a market that has seen plenty of interest from major power producers in wind generation. BP, NRG Energy and Iberdrola have each spent hundreds of millions of dollars over the past year buying U.S.-based wind power assets.

A Goldman spokesman refused to comment on the transaction.

By Roddy Boyd
roddy.boyd@nypost.com

nypost.com