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Talen Energy Expands PJM Footprint With $2.55 Billion Acquisition

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Talen Energy (TLN) has completed the acquisition of three power plants in Indiana and Ohio from Energy Capital Partners, a deal that is set to bolster its cash flow and deepen its footprint in the western PJM interconnection, the companies said Tuesday.

The transaction adds the Lawrenceburg Power Plant in Indiana and the Waterford Energy Center and Darby Generating Station in Ohio to Talen's portfolio.

Talen said the acquisition adds efficient baseload generation assets to its portfolio, broadens its presence in the western portion of the PJM Interconnection region, and diversifies its generation fleet.

Under the terms of the deal, Energy Capital received 2.4 million shares of Talen common stock and about $2.55 billion in cash, subject to post-closing adjustments.

Talen said the deal is immediately accretive, adding more than 15% to per-share cash flow and strengthening its trajectory toward annual free cash flow exceeding $40 per share by 2028.

The assets are expected to enhance exposure to the western PJM power market, where demand for flexible generation has been increasing alongside data center-driven load growth.

To support the acquisition, Talen's subsidiary, Talen Energy Supply (TES), completed a series of financing transactions, including upsizing its revolving credit facility to $1.35 billion, expanding its letter of credit capacity to $1.5 billion, and extending maturities to 2029.

The energy firm also issued senior unsecured notes in April to fund the deal.

Talen said the proceeds were partly used to redeem higher-cost debt, cutting annual interest expense by more than $40 million and adding about $1 per share to free cash flow.

The independent power producer now operates about 15.6 gigawatts of generation capacity across the US, including nuclear, gas, and other dispatchable assets concentrated in PJM, the Mid-Atlantic, Ohio, Indiana, and Montana.

Price: $412.46, Change: $+26.25, Percent Change: +6.80%

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