Retail Energy Supplier To Be Acquired By Private Equity Firm -- EnergyChoiceMatters.com

Retail Energy Supplier To Be Acquired By Private Equity Firm

April 6, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Retail energy suppliers Atlantic Energy LLC ("Atlantic Energy"), Atlantic Energy MD, LLC ("Atlantic Energy MD"), and Atlantic Energy MA LLC ("Atlantic Energy MA," and collectively with Atlantic Energy and Atlantic Energy MD, "Applicants") have entered into a transaction under which Gainline Equity Fund LP ("Gainline") will indirectly acquire a majority of the limited liability company interests in Atlantic Energy Group LLC ("Atlantic Energy Group"), the direct parent company of Applicants, from PLLH Holdings LLC ("PLLH Holdings") and USAP Group LLC ("USAP Group") (collectively, "Sellers") (the "Gainline Transaction").

Upon closing of the Gainline Transaction, each of the Applicants will be 100% directly owned by Atlantic Energy Acquisition Inc., a new company formed to own Atlantic Energy Group and indirectly majority-owned by Gainline.

Currently, each of the Applicants is currently 100 percent directly owned by Atlantic Energy Group, a Delaware limited liability company. Atlantic Energy Group is, in turn, owned equally (50 percent each) by PLLH Holdings (which is 100 percent owned by Patrick Linden, Co-Chief Executive Officer of Atlantic Energy Group) and USAP Group (which is 65 percent owned by James Uglow, Co-Chief Executive Officer of Atlantic Energy Group, and 35 percent owned by Jack Hennessy).

In addition to various retail electric and natural gas suppliers under the Atlantic Energy brand name, Atlantic Energy Group also owns 100 percent of two non-Commission jurisdictional business entities: Atlantic Home and Business, LLC and Atlantic LED, LLC, which perform sales and marketing services for the Applicants.

Gainline Equity Fund LP ("Gainline") is an investment fund vehicle of a private equity firm headquartered in North America that invests in U.S.-based middle market companies. Gainline is controlled by its general partner, Gainline Equity Fund GP LLC. The Management Company is controlled by its general partner, Gainline Capital Holdings GP, LLC.

To carry out the Gainline Transaction, three new companies have been formed—Gainline Atlantic Acquisition Inc. ("AcquisitionCo"), Gainline Intermediate Inc. ("IntermediateCo"), and Gainline Atlantic Holdings LLC ("HoldCo"). Upon the consummation of the Gainline Transaction, Atlantic Energy Group shall be 100 percent wholly owned by AcquisitionCo, which shall be 100 percent wholly owned by IntermediateCo, which shall be 100 percent wholly owned by HoldCo, which shall be majority-owned by Gainline and its various passive, limited partner investors, with the Sellers as minority holders of limited liability company interests in HoldCo. The limited partner investors in Gainline hold passive, non-controlling, non-voting economic interests. Their status as limited partner investors gives them no authority or right to make decisions for, or to affect the day-business of, either Gainline or Gainline’s investments, including Applicants.

Gainline’s general partner, which controls Gainline, is Gainline Equity Fund GP LLC. Gainline Equity Fund GP LLC is wholly owned and controlled by Gainline Capital Holdings GP, LLC. Consequently, Gainline and its Management Company each ultimately is controlled by Gainline Capital Holdings GP, LLC.

As described above, PLLH Holdings and USAP Group each currently directly owns 50 percent of the limited liability company interests in Atlantic Energy Group, and, thereby, PLLH Holdings and USAP Group each currently indirectly owns 50 percent of each of the Applicants. Pursuant to the Gainline Transaction, AcquisitionCo will acquire a majority of the limited liability interests in Atlantic Energy Group from PLLH Holdings and USAP Group. Sellers will contribute the remainder of their interests in Atlantic Energy Group to HoldCo in exchange for a minority ownership interest in HoldCo. HoldCo will simultaneously (or immediately thereafter) contribute those equity interests to AcquisitionCo, which will then own 100% of the interests in Atlantic Energy Group and the Applicants.

As a result of the Gainline Transaction, Gainline will indirectly acquire a majority of the limited liability company interests in Atlantic Energy Group and a majority interest in each of the Applicants.

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