Talen Energy Corporation announced a $3.45 billion purchase of approximately 2.6 GW of natural‑gas generation capacity from Energy Capital Partners. The deal consists of $2.55 billion in cash and $900 million in Talen stock and will close in the second half of 2026. The assets comprise the Waterford Energy Center and Darby Generating Station in Ohio and the Lawrenceburg Power Plant in Indiana, all located in the western PJM market.
The acquisition is a key element of Talen’s “flywheel” strategy, which seeks to grow a dispatchable fleet that can serve the rapidly expanding data‑center market. By adding efficient combined‑cycle gas turbines with high capacity factors, the company will double its annual production in two years and strengthen its presence in a region that is experiencing significant data‑center tailwinds. The transaction also aligns with Talen’s focus on high‑efficiency, low‑carbon assets and its goal of maintaining a net leverage target of 3.5× or lower by the end of 2026.
Financially, the deal is expected to generate immediate and significant accretion to adjusted free‑cash‑flow per share, projected at more than 15% annually through 2030. The purchase price represents a 6.6× multiple of 2027E adjusted EBITDA, a valuation that is attractive compared to Talen’s current enterprise‑value‑to‑LTM EBITDA multiple of 31.8×. The company will fund the cash portion of the purchase with new debt, while the equity component will dilute existing shareholders but also bring Energy Capital Partners into the ownership structure as a strategic partner.
Operationally, the acquired plants are modern, high‑efficiency CCGTs that provide both baseload and peaking capability. The Waterford and Lawrenceburg facilities are known for their high capacity factors and favorable heat rates, while the Darby plant adds commercial flexibility. Integration plans will focus on leveraging existing transmission assets and aligning maintenance schedules to maximize uptime and revenue generation.
The announcement was well received by investors, who highlighted the strategic fit, the financial accretion, and the attractive valuation multiple as key drivers of the positive reaction. Management emphasized the deal’s role in accelerating Talen’s growth trajectory and its ability to serve hyperscale data‑center customers. CEO Mac McFarland said, “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.” President Terry Nutt added, “The transaction will allow us to double our annual production in two years and diversify our fleet, increasing cash flow per share.”
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