Talen Energy to acquire Moxie, Guernsey gas-fired plants for $3.5B

Talen Energy (TLN) announced it has signed 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 combined-cycle gas-fired plants located within the PJM power market. The net acquisition price is $3.5B after adjusting for estimated tax benefits, or approximately $3.8B gross. 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. The transaction is expected to be immediately accretive to free cash flow per share by over 40% in 2026, and over 50% through 2029. The plants have an average heat rate of 6,550 Btu/kWh. Their highly efficient dispatch profile results in significant energy margin and strong cash flow conversion and increases our annual generation by 50% from approximately 40 TWh to 60 TWh. Immediately accretive to free cash flow per share by over 40% in 2026, and over 50% through 2029. Talen expects to issue approximately $3.8B in new debt to fund the acquisitions and refinance target debt, using both secured and unsecured instruments. The Moxie and Guernsey transactions are both expected to close in Q4 2025. Each transaction is subject to the satisfaction of customary closing conditions, including the expiration or termination of the waiting period pursuant to the Hart-Scott-Rodino act, and regulatory approvals from the Federal Energy Regulatory Commission and other regulatory agencies. As part of the transaction, Talen is also acquiring the equity interests in Guernsey owned by the mid-market infrastructure funds managed by Global Infrastructure Partners, a part of BlackRock (BLK).