Vistra Corp. on Jan. 5 announced it has executed definitive agreements to acquire Cogentrix Energy, consisting of 10 modern natural gas generation facilities totaling approximately 5,500 MW of capacity.
Cogentrix is indirectly owned by funds managed by Quantum Capital Group. The acquisition includes three combined cycle gas turbine facilities and two combustion turbine facilities located across PJM, four combined cycle gas turbine facilities in ISO New England, and one cogeneration facility in ERCOT.
Vistra will acquire these assets at a net purchase price of approximately $4.0 billion, which is comprised of the payment of approximately $2.3 billion of cash consideration and approximately $0.9 billion of Vistra stock consideration (5 million shares of common stock at a mutually agreed-upon value of $185 per share) to be issued to Quantum, and the assumption of approximately $1.5 billion of outstanding indebtedness at Cogentrix, less approximately $0.7 billion of net present value of expected tax benefits generated directly as a result of the transaction.
The consideration payable is also subject to certain customary net working capital, cash, and indebtedness adjustments. The approximately $4.0 billion net purchase price implies a multiple of approximately 7.25x the 2027 expected Adjusted EBITDA contribution and approximately $730/kW for the portfolio.
Vistra listed the following, among other things, as comprising the strategic rationale for the deal:
- Adds Attractive Portfolio of Modern and Efficient Natural Gas Assets: Cogentrix portfolio is composed of a modern and efficient set of gas assets that adds baseload-weighted capacity, complements Vistra's fleet, and enhances Vistra's efficient generation capabilities. The portfolio has an average heat rate of approximately 7,800 Btu / kWh and features the Patriot and Hamilton-Liberty plants, which are 2016 COD facilities with sub 7,000 Btu / kWh heat rates.
- Expands Integrated Fleet in Key Regions: Acquisition diversifies and expands Vistra's geographic footprint by adding 5,500 MW of net capacity across some of the most attractive and fastest-growing power regions in North America: PJM, ISO New England, and ERCOT. Combined with its current fleet, Vistra's generation portfolio will consist of approximately 50,000 MW of capacity across the US.
The transaction is subject to certain regulatory approvals, including by the Federal Energy Regulatory Commission, the Department of Justice under the Hart-Scott-Rodino Act, and certain state regulatory approvals, and is expected to close in mid-to-late-2026.
