Talen Energy announced it will acquire Caithness Energy’s Moxie Freedom Energy Center in Pennsylvania and Caithness Energy and BlackRock’s Guernsey Power Station in Ohio, both located in the PJM market.
The total price is $3.5 billion net, approximately $3.8 billion gross, reflecting a 6.7x 2026 EV/EBITDA multiple, which offers a discount to new-build costs. The deal is expected to increase free cash flow per share by over 40% in 2026 and by more than 50% through 2029.
The highlights include expanding Talen’s fleet with efficient, high-capacity natural gas plants, increasing generation by 50% to 60 TWh, and leveraging a strategic location for reliable gas access. The acquisition supports diversification into data center and large-load contracting, with increased operational flexibility and proximity to load centers.
The transaction is immediately accretive to free cash flow, maintains a strong balance sheet with targeted leverage of 3.5x or lower by the end of 2026, and supports annual share repurchases of approximately $500 million through 2026, with a focus on capital discipline.
Talen plans to issue approximately $3.8 billion in new debt and expects to close the deals in the fourth quarter of 2025, subject to regulatory approvals and customary conditions. It also involves acquiring GIP’s equity interests in Guernsey.
Advisors:/counsel/support RBC Capital Markets and Citi are co-lead financial advisors to Talen. Kirkland & Ellis LLP and White & Case LLP are legal counsel to Talen. Cahill Gordon & Reindel is legal counsel to RBC Capital Markets and Citi. Lazard is the lead financial advisor to Caithness. Paul Hastings LLP is legal counsel to Caithness. Morgan Stanley & Co. LLC served as lead financial advisor, and Simpson Thacher & Bartlett LLP is legal counsel to Global Infrastructure Partners, a part of BlackRock.
KEY QUOTES:
“This acquisition enhances Talen’s fleet by selectively adding modern, highly efficient baseload H-class CCGTs in Talen’s key markets, where we are an innovator in data center contracting. The transaction is immediately and highly accretive, maintains our balance sheet discipline, and adds more than the equivalent of another Susquehanna nuclear plant to our platform, further enabling large load service.”
Mac McFarland, Talen President and Chief Executive Officer
“Caithness has built an extensive portfolio of leading-edge power generation facilities to support our valued customers. We are proud of what we have accomplished and this sale to Talen positions the assets for continued success under a strong and successful management team.”
James D. Bishop, Jr., Chairman and CEO of Caithness Energy
