UPDATE 1-Babcock & Brown buys NRG Flinders power assets��Reuters.com

SYDNEY, June 2 (Reuters) - Australian investment firm Babcock & Brown Ltd. (BNB.AX: Quote, Profile, Research) said on Friday it had acquired NRG Energy Inc's (NRG.N: Quote, Profile, Research) South Australian power assets, known as NRG Flinders, for A$513 million ($385 million).
Babcock, an investment and advisory firm which listed in Australia in 2004, will acquire 760 megawatts (MW) of electricity generation infrastructure, representing 50 percent of capacity in South Australia state.
The assets include the 520 MW Northern and 240 MW Playford power stations, as well as the Leigh Creek coal mine which fires them and contracts to buy electricity from and supply gas to the third-party Osborne co-generation power station until 2018.
The Northern and Playford stations mainly compete with higher-cost gas-fired facilities in a state characterised by limited inter-connections to Australia's eastern states and scarce long-term indigenous sources of fuel.
In calendar 2005 NRG Flinders posted earnings before interest, tax, depreciation and amortisation (EBITDA) of A$43.5 million. At an enterprise value of A$513 million the firm has an EBITDA multiple of 11.8.
Babcock will fund the acquisition through internal resources and a debt facility established for the acquisition of generation assets. It will pay A$317 million in cash and assume A$238 million in debt, but will receive the A$42 million in cash on NRG Flinders' balance sheet.
Independent U.S. power producer NRG said it expects to receive after-tax cash proceeds of A$312 million ($234 million) and book a pre-tax gain of approximately A$64 million ($48 million).
Babcock and Brown shares were last trading up 1.6 percent at A$20.44 in an overall market up 0.4 percent. NRG closed up 1.1 percent in New York at $50.30 before the transaction was announced.
Babcock-managed funds have being investing recently in wind farm assets, Japanese property, a utility operator in the United States, rail infrastructure in Australia and a port in Britain.
In May the Babcock-managed Babcock & Brown Capital Ltd. (BCM.AX: Quote, Profile, Research) through an Irish vehicle agreed to buy Eircom Group Plc. (EIR.I: Quote, Profile, Research) in a deal valued at 2.4 billion euros ($3 billion). ($1=A$1.33)