Vistra Expands Gas Generation Portfolio with $1.9B Acquisition
irving – May 9, 2024 – Vistra Corp. announced a notable expansion of its generation capabilities through the acquisition of seven natural gas facilities. The $1.9 billion deal with Lotus Infrastructure Partners increases Vistra’s capacity by approximately 2,600 megawatts. The agreement highlights the growing importance of natural gas in the energy sector and positions Vistra as a key player.For more details,see below.
Vistra Expands Generation Portfolio with Natural Gas Asset Acquisition
Irving, Texas – Vistra Corp. (NYSE: VST) announced it has finalized an agreement to acquire seven modern natural gas generation facilities from Lotus Infrastructure Partners. The deal, valued at $1.9 billion, adds approximately 2,600 megawatts of capacity to Vistra’s already substantial generation portfolio.
The acquisition includes five combined cycle gas turbine (CCGT) facilities and two combustion turbine (CT) facilities. These assets are strategically located across PJM, New England, New York, and California, further diversifying Vistra’s natural gas fleet geographically.
Strategic Rationale
Vistra’s leadership views this acquisition as an “opportunistic expansion” of its generation footprint in key competitive markets. According to Vistra President and CEO jim Burke, We beleive natural gas fired generation will continue to play an ever-increasing role in the reliability, affordability, and flexibility of U.S. power grids for years to come. the addition of this attractive portfolio of combined cycle and peaking assets allows Vistra to serve growing power demand while exceeding our mid-teens levered return target.
Burke also emphasized Vistra’s proven track record in integrating acquired assets, stating, Importantly, as our experienced team has demonstrated previously with the acquisitions of Dynegy and Energy Harbor, successfully integrating fleets of generation assets is a core competency of our company. We look forward to closing the transaction and welcoming new team members to the Vistra family.
Transaction Details
- The acquisition price is approximately $743/kW of capacity.
- The deal is expected to deliver Ongoing Operations Adjusted free Cash Flow before Growth (AFCFbG) accretion in the first year following closing.
- Vistra plans to maintain its long-term net leverage target of less than 3x.
- the company reiterates its capital allocation plan, including $300 million in annual dividends and at least $1 billion in share repurchases each year.
Lotus Infrastructure Partners’ Perspective
Himanshu Saxena, Chairman and CEO of Lotus Infrastructure Partners, expressed satisfaction with the agreement, stating, We are pleased to have reached an agreement to sell this gas plant portfolio to a proven operator like Vistra.The Lotus team has acquired, developed, and operated this portfolio of high-quality assets for many years, which has helped us deliver this win-win transaction for our investors.
Portfolio Overview
The acquired assets include:
| Asset | State | Capacity (MW) | Technology |
|---|---|---|---|
| Fairless | Pennsylvania | 1,320 | CCGT |
| Manchester | Rhode Island | 510 | CCGT |
| Garrison | Delaware | 309 | CCGT |
| Hazleton | Pennsylvania | 158 | CT |
| Beaver Falls | New York | 108 | CCGT |
| Syracuse | New York | 103 | CCGT |
| Greenleaf | California | 49 | CT |
| Total | 2,557 |
Financial Implications
vistra is acquiring these assets for $1.9 billion,or approximately $743/kW,subject to net working capital adjustments. The company expects to fund the transaction through the assumption of an existing term loan from Lotus and available cash. the assumed term loan is projected to cover roughly 50% of the consideration at closing. The purchase price represents a multiple of approximately 7x 2026 Adjusted EBITDA, excluding potential synergies.
Conditions and Timeline
The acquisition is contingent upon regulatory approvals, including those from the Federal Energy Regulatory Commission and the Department of Justice under the Hart-Scott-Rodino Act. The transaction is anticipated to close in late 2025 or early 2026.
Advisors
Barclays and Moelis & Company LLC served as financial advisors to Vistra, while Latham & watkins LLP and Cleary Gottlieb Steen & Hamilton LLP provided legal counsel. Lazard acted as the exclusive financial advisor to lotus infrastructure Partners, with legal advice from King & Spalding LLP and Eversheds Sutherland.
