Talen Energy Corporation (NASDAQ: TLN) experienced a sharp uptick in pre-market trading following the announcement of a transformative acquisition. As of the latest check, TLN shares had climbed 16.77% to $308.27.
The boost comes in response to definitive agreements signed by Talen Energy to acquire two state-of-the-art combined-cycle gas-fired plants—Moxie Freedom Energy Center in Pennsylvania and the Guernsey Power Station in Ohio—from Caithness Energy and BlackRock.
Strategic Acquisition Strengthens Generation Capacity
The net acquisition value stands at $3.5 billion after estimated tax benefits, or $3.8 billion gross. When compared to the current costs of constructing new combined-cycle gas turbine (CCGT) facilities, Talen Energy obtained the assets for an enterprise value-to-EBITDA multiple of 6.7x for 2026.
Free cash flow per share is expected to increase by more than 40% in 2026 and more than 50% through 2029 as a result of the highly accretive transaction.
Boosting Operational Flexibility and Grid Support
These highly efficient H-class CCGTs are strategically located within the PJM power market and will increase Talen’s annual generation capacity by 50%, from 40 TWh to 60 TWh. With an average heat rate of 6,550 Btu/kWh and proximity to the Marcellus and Utica shale formations, both plants benefit from reliable and cost-advantaged natural gas supply.
Talen’s acquisition positions the company to better support scalable, low-carbon power solutions for hyperscale data centers and large commercial clients requiring 24/7 availability.
Improved Contracting and Financial Position
In order to achieve a target leverage ratio of 3.5x or less by the end of 2026, Talen anticipates that the deal will sustain balance sheet strength and accelerate deleveraging. During the deleveraging stage, the pro forma business also projects yearly share repurchases of about $500 million.
With an eye toward the future, Talen wants to distribute 70% of adjusted free cash flow to shareholders, highlighting its dedication to shareholder returns and prudent capital management. A key step in TLN’s long-term growth plan, this strategic purchase represents a major extension of the company’s generating platform.
