Vistra has closed a deal to acquire seven natural gas plants with a total capacity of approximately 2,600 MW. The transaction, valued at US$1.9 billion, represents a major strategy to strengthen its generation fleet in the United States.
A strategic natural gas plant operation
The acquisition includes five combined cycle facilities and two combustion turbine plants. These are distributed in regions such as PJM, New England, New York and California, allowing it to expand its territorial coverage in competitive markets in the electricity sector.
The company will fund the transaction with cash on hand and the assumption of an existing term loan from Lotus Infrastructure Partners. This structure will allow the company to maintain a reasonable leveragewhile estimating that the purchase will generate an incremental 1 AFCFbG per share from continuing operations. The valuation reflects a multiple of approximately seven times estimated 2026 adjusted EBITDA, excluding potential synergies.
With this transaction, Vistra maintains its focus on developing an energy network that is balanced between sustainability, reliability and return for its shareholders. Moreover, the company has demonstrated experience in integrating fleets following the previous acquisitions of Dynegy and Energy Harbor.
We believe that natural gas-fired generation will continue to play an increasingly important role in the reliability, affordability and flexibility of U.S. electric grids for years to come.
The addition of this attractive portfolio of combined-cycle and peak-season assets enables Vistra to meet growing energy demand while exceeding our leveraged return target of approximately 15%.
Jim Burke, president and chief executive officer of Vistra.
The transaction is subject to regulatory approvals, including the Federal Energy Regulatory Commission and the Department of Justice under the Hart-Scott-Rodino Act. Closing is expected to occur toward the end of 2025 or early 2026.
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Source and photo: Vistra
