Talen Energy Corporation (NASDAQ:TLN) stock rose Thursday after the company said it signed definitive agreements to acquire three large natural gas power plants in the Midwest.
The transaction carries a total value of $3.45 billion, made up of cash and equity.
Talen will pay $2.55 billion in cash and issue about $900 million in stock. As of Sep. 30, 2025, Talen Energy had cash and equivalents worth $497 million.
The valuation represents roughly 6.6 times projected 2027 adjusted EBITDA.
The deal will significantly expand the company’s footprint in the western PJM electricity market.
The company will buy the Waterford and Darby facilities in Ohio and the Lawrenceburg plant in Indiana from Energy Capital Partners.
Financial Impact
Talen expects free cash flow per share to rise more than 15% each year through 2030. The assets should convert about 85% of cash flow before tax benefits.
Management also expects leverage to fall to 3.5x or lower by the end of 2026. Strong operating cash flow should support faster balance-sheet repair.
Management expects the assets to deliver strong free cash flow immediately after closing.
The acquisition includes 2.6 gigawatts of natural gas capacity. The three plants will add baseload and flexible generation to Talen’s growing portfolio.
Power Assets And Performance
Lawrenceburg and Waterford operate as combined-cycle gas turbine facilities. Both units run at capacity factors above 80% and offer high efficiency.
The Darby plant operates as a peaking facility. It allows Talen to respond quickly to shifts in electricity demand.
The plants receive fuel from Marcellus and Utica shale supplies. That access supports low operating costs and reliable long-term output.
Why Talen Made The Deal
Mac McFarland, CEO of Talen Energy, stated that the acquisition strengthens the company’s exposure to data center demand. He said it also keeps the company disciplined on capital.
“This acquisition further diversifies Talen’s generation portfolio by adding both baseload capacity and strong cash flow contribution,” McFarland said.
Energy Capital Partners, the seller, will become a large shareholder. It will receive Talen equity as part of the purchase price.
“Talen has demonstrated that its platform of scale is uniquely positioned to serve PJM’s large customers,” said Andrew Gilbert, partner at Energy Capital Partners.
TLN Price Action: Talen Energy shares were up 8.91% at $408.24 at the time of publication on Thursday, according to Benzinga Pro data.
