Energy firm Talen set to acquire Ohio and Pennsylvania power plants for approximately $3.5 billion dollars.
## Talen Energy Strengthens Portfolio with Acquisition of Gas-Fired Power Plants
In a significant move, Talen Energy has announced the acquisition of two combined-cycle gas-fired (CCGT) power plants, the Moxie Freedom Energy Center in Pennsylvania and the Guernsey Power Station in Ohio. These power plants, owned by Caithness Energy and BlackRock respectively, are set to bolster Talen Energy's portfolio and position the company as a major player in the PJM power market.
### Key Points of the Acquisition
The acquisition includes a net purchase price of approximately $3.5 billion, adjusted for estimated tax benefits, with a gross value of $3.8 billion. This reflects an attractive acquisition multiple of 6.7 times the 2026 enterprise value to EBITDA.
The Moxie Freedom Energy Center in Pennsylvania generates over 1,000 megawatts of electricity, while the Guernsey Power Station in Ohio has a capacity of 1,875 megawatts. Both plants are among the most efficient gas-fired facilities in the PJM Interconnection market, enhancing Talen's ability to provide efficient power.
The acquisition supports Talen’s expansion in low-carbon capacity, enabling the company to better serve large-scale users such as data centers with reliable and scalable power.
### Financial Impact
The transaction is expected to increase Talen Energy's free cash flow per share by more than 40% in 2026, exceeding 50% through 2029. Talen Energy will fund the acquisitions and refinance target debt by issuing approximately $3.8 billion in new debt, a combination of secured and unsecured instruments.
### Implications and Analysis
This acquisition positions Talen Energy as a major player in efficient baseload power generation within the PJM market, further solidifying its role in supporting large-scale energy consumers. The plants are strategically located to leverage the Marcellus and Utica shale gas reserves, enhancing Talen's logistical advantages in the region.
Following the announcement, Talen Energy's stock experienced a significant increase, reflecting investor optimism about the deal's potential for growth and profitability. The acquisition multiple for the two power plants is 6.7x 2026 EV/EBITDA, indicating a strong financial outlook for the company.
The acquisitions are expected to enhance Talen Energy's ability to offer reliable, scalable, grid-supported, and regionally diverse low-carbon capacity to hyperscale data centers and large commercial offtakers, further solidifying its position in the market. The transactions are subject to regulatory approvals and are expected to close in Q4 2025.
Talen Energy's current financial status is likely to improve with the acquisition of two gas-fired power plants, as the deal is projected to increase the company's free cash flow per share by more than 40% in 2026 and exceed 50% through 2029. The financing for the acquisitions will be secured through the issuance of approximately $3.8 billion in new debt, reflecting a strong financial outlook for the company, given the attractive acquisition multiple of 6.7 times the 2026 enterprise value to EBITDA.
