M&A: Talen to acquire two gas plants from Caithness, BlackRock for USD 3.5bn net
Talen Energy has signed definitive agreements to acquire two combined-cycle gas-fired power plants—Moxie Freedom in Pennsylvania and Guernsey Power Station in Ohio—from Caithness Energy and BlackRock for a net purchase price of USD 3.5bn, according to press release.
The acquisition, expected to close in Q4 2025, will add high-efficiency H-class CCGTs to Talen’s portfolio in the PJM market, increasing its generation capacity by 50%, from 40 TWh to 60 TWh annually. Talen said the deal will be immediately accretive to free cash flow per share by 40% in 2026 and over 50% through 2029, while supporting its data center power contracting strategy.
The company plans to issue USD 3.8bn in new debt to fund the transaction and refinance existing obligations. Regulatory approvals from FERC and other agencies are pending.
RBC Capital Markets and Citi are co-lead financial advisors to Talen. Kirkland & Ellis LLP and White & Case LLP are legal counsel to Talen. Cahill Gordon & Reindel LLP is legal counsel to RBC Capital Markets and Citi.
Lazard is lead financial advisor to Caithness. Paul Hastings LLP is legal counsel to Caithness. Morgan Stanley & Co. LLC served as lead financial advisor and Simpson Thacher & Bartlett LLP is legal counsel to Global Infrastructure Partners, a part of BlackRock.
NPM reported on the Lazard mandate in April.
The net purchase price reflects an attractive acquisition multiple of 6.7x 2026 EV/EBITDA for two of the most efficient natural gas plants in PJM, at a material discount to current new-build CCGT costs, according to the news release.
“This acquisition enhances Talen’s fleet by selectively adding modern, highly efficient baseload H-class CCGTs in Talen’s key markets, where we are an innovator in data center contracting,” said Mac McFarland, Talen President and Chief Executive Officer. “The transaction is immediately and highly accretive, maintains our balance sheet discipline, and adds more than the equivalent of another Susquehanna nuclear plant to our platform, further enabling large load service.”
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