Goldman, Sachs & Co. announced Oct. 27 that it took a minority equity stake for an undisclosed amount in Blue Source LLC, a portfolio company of private equity shop First Reserve Corp. Salt Lake City-based Blue Source, which develops projects to reduce greenhouse gases, including creating carbon credits, turned to Blackstone Group LP for financial advice on the transaction.

So how did a small company in Utah catch Blackstone's attention?

Blue Source's CEO and co-founder, Bill Townsend, says it was a mix of good timing and focusing on the fast-growing sectors of energy and climate change. In early 2007, Blue Source received a call from a large PE shop that was interested in buying the company. That led Blue Source to compile a list of strategic partner candidates, including Goldman Sachs. "We didn't expect the Street to think the same way we were, but, sure enough, they did," says Townsend, who founded Blue Source with president Greg Spencer in 1995.

Soon after, Spencer and Townsend flew to New York to shop for a financial adviser that could help them find a strategic partner. Blue Source rang Blackstone's then-senior managing director, Erik Katz, hoping that he'd connect them with a firm closer to their league.

"We thought [Blackstone] would never take us on as a client," says Townsend. "We thought we were too small. They concluded that this was their opportunity to learn about carbon through a deal."

Blue Source's Blackstone connection began 10 years ago, when Spencer was treasurer of American Stores Co., which Katz advised in its sale to Albertson's Inc. In 2005, Katz introduced Blue Source to First Reserve, which took a majority stake in Blue Source in 2006. Blackstone has advised Blue Source in analyzing its list of marketing and capital partners candidates since last year.

Goldman Sachs managing director Robert Mancini and vice president Gerrit Nicholas led the transaction for their bank and vice president Jean-Philippe Brisson assisted them. All are part of J. Aron & Co., the bank's commodities division. Mancini heads Goldman's global commodities principal investment business. Nicholas heads the North American environmental commodities sales team. Brisson, a member of that team, was previously a senior counsel at Allen & Overy LLP, where he worked on a number of carbon-trading and climate-change transactions.

For legal advice, Goldman turned to Linklaters LLP partners Scott Sonnenblick and Stan Renas in New York and Vanessa Havard-Williams in London.

Blue Source used Baker & McKenzie LLP lead partner Richard Saines and partners Marc Horwitz, Charles Hallab, Steve Griesemer, William Wagner, Richard Lipton and Michael Donovan for legal advice. Saines heads Baker & McKenzie's global climate change and emissions trading practice group in the U.S.

In the end, a dealmaker on the Blue Source side emerged with a good deal himself. Katz recently ended a 17-year career at Blackstone to join Blue Source as chief operating officer, and Blue Source's founders consider Blackstone their regular financial adviser, where vice president Hari Chandra handles the relationship. "We're in the middle of another project now, and Blackstone is working on it," Townsend says.