Vistra Corp. has signed a definitive agreement to buy seven natural gas-fired generation facilities spread across different states from Lotus Infrastructure Partners for $1.9 billion.
The acquisition consists of five combined-cycle gas turbine plants and two combustion turbine plants in California, Delaware, New York, Pennsylvania and Rhode Island, “further geographically diversifying Vistra’s natural gas fleet”, Vistra said in an online statement.
The plants have a combined capacity of 2,557 megawatts (MW). The biggest of them is the Fairless plant in Pennsylvania, which produces up to 1,320 MW.
The transaction price translates to $743 per kilowatt, subject to net working capital adjustments, according to the Irving, Texas-based power utility.
“Vistra expects to fund the transaction with the assumption of an existing term loan from Lotus and cash on hand”, it said. “Although the principal amount of the term loan to be assumed is subject to change, it is currently expected to be approximately 50 percent of the consideration at closing.
“The purchase price implies a multiple of approximately 7x 2026 Adjusted EBITDA [earnings before interest, taxes, depreciation and amortization), excluding any potential synergies”.
The parties expect to complete the transaction late this year or early 2026, subject to regulatory approvals including anti-trust clearance.
Vistra said the acquisition will not change its previously set capital allocation plans including $300 million in annual dividends and at least $1 billion in share buybacks each year.
“We are excited to announce another opportunistic expansion of our generation footprint in some of our key competitive markets”, said Vistra president and chief executive Jim Burke. “We believe natural gas-fired generation will continue to play an ever-increasing role in the reliability, affordability, and flexibility of U.S. power grids for years to come.
“The addition of this attractive portfolio of combined cycle and peaking assets allows Vistra to serve growing power demand while exceeding our mid-teens levered return target”.
“Importantly, as our experienced team has demonstrated previously with the acquisitions of Dynegy and Energy Harbor, successfully integrating fleets of generation assets is a core competency of our company”, Burke added. “We look forward to closing the transaction and welcoming new team members to the Vistra family”.
In 2018 Vistra merged with Dynergy Inc., positioning itself as “the leading integrated retail and generation platform throughout key competitive power markets in the United States”.
Immediately after the combination, the enlarged Vistra had about 40,000 MW of installed generation capacity, according to a company statement April 9, 2018.
Last year Vistra took over Energy Harbor Corp., adding to its portfolio about 4,000 MW of 24/7 nuclear generation.
Currently Vistra has about 41,000 MW of capacity, enough to power 20 million homes, according to the company. The capacity is spread across “all of the major competitive wholesale markets in the country”, it says on its website. Its portfolio includes coal, gas, nuclear, solar and battery energy storage facilities.
To contact the author, email jov.onsat@rigzone.com
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