Talen Energy Corporation (NASDAQ:TLN) shares rose about 5% on Thursday after the company said it will acquire three natural gas-fired power plants from Energy Capital Partners in a deal valued at $3.45 billion.
The transaction will add roughly 2.6 gigawatts of natural gas generation capacity to Talen’s portfolio through the purchase of the Waterford Energy Center and Darby Generating Station in Ohio, along with the Lawrenceburg Power Plant in Indiana. The consideration includes $2.55 billion in cash and approximately $900 million in Talen stock.
Talen said the acquisition values the assets at about 6.6 times estimated 2027 adjusted EBITDA and is expected to be immediately accretive to adjusted free cash flow per share, delivering annual accretion of more than 15% through 2030.
“This acquisition further diversifies Talen’s generation portfolio by adding both baseload capacity and strong cash flow contribution and enhances our presence in the western PJM market, which has significant data center tailwinds,” said Mac McFarland, chief executive officer of Talen Energy.
The Lawrenceburg facility, with 1,218 megawatts of capacity, and the 869-megawatt Waterford plant are modern combined-cycle gas turbines, featuring average heat rates of around 7,000 Btu per kilowatt-hour and capacity factors above 80%. The 480-megawatt Darby facility operates primarily as a peaking unit.
Talen said the deal is expected to preserve balance sheet strength, with strong pro forma cash flows supporting rapid deleveraging. The company is targeting net leverage of 3.5 times or lower by the end of 2026.
As part of the transaction, Energy Capital Partners will become a significant shareholder in Talen. The acquisition follows the company’s earlier purchases of the Freedom and Guernsey facilities, extending its strategy of expanding and diversifying its generation portfolio.
More about Talen Energy
Talen Energy is a U.S.-based power generation company with a diverse portfolio of natural gas, nuclear, and renewable assets. The company supplies electricity across multiple wholesale markets, with a growing focus on regions benefiting from rising demand tied to data centers and electrification trends.