Talen Energy To Acquire Two Gas Plants For $3.5 Bln, Boosting Capacity And Cash Flow

(RTTNews) - Talen Energy Corporation (TLN), a leading independent power producer, has entered into definitive agreements to acquire Caithness Energy's Moxie Freedom Energy Center in Pennsylvania and Caithness Energy and BlackRock's Guernsey Power Station in Ohio.

Both facilities are highly efficient, combined-cycle gas-fired plants located in the PJM power market. The net purchase price is $3.5 billion, adjusted for tax benefits, with a gross price of approximately $3.8 billion. The acquisition is expected to be immediately accretive, increasing Talen's free cash flow per share by over 40 percent in 2026 and over 50 percent through 2029.

Talen President and CEO Mac McFarland stated that the acquisition strengthens the company's generation platform with modern H-class CCGTs, supporting its expansion into data center contracting and enhancing large-load service capabilities. Caithness CEO James D. Bishop, Jr. expressed confidence in the assets' future under Talen's management, highlighting Caithness's track record in building innovative power facilities.

Strategic Highlights: The two plants will expand Talen's fleet by 50 percent, increasing its annual generation from 40 TWh to 60 TWh. With average heat rates of 6,550 Btu/kWh and reliable access to gas from the Marcellus and Utica shale formations, the plants offer operational efficiency, strong margins, and cash flow stability. Their locations also position Talen to serve hyperscale data centers and large commercial customers with reliable, regionally diverse, low-carbon capacity.

The deal supports Talen's capital allocation strategy, targeting $500 million in annual share repurchases through 2026 and a return to allocating 70 percent of adjusted free cash flow thereafter. Talen expects the strong pro forma cash flows to reduce leverage to 3.5x or lower by the end of 2026.

To finance the acquisitions and refinance debt, Talen will issue approximately $3.8 billion in new secured and unsecured debt. The transactions are expected to close in the fourth quarter of 2025, pending customary closing conditions, regulatory approvals, and Hart-Scott-Rodino clearance. Talen will also acquire Guernsey equity interests held by Global Infrastructure Partners, part of BlackRock.

Thursday, TLN closed at $264.00, down 0.29%, and was trading after hours at $305.75, up 15.81%, on the NasdaqGS.