
NRG Energy has agreed to acquire a portfolio of natural gas generation facilities and a commercial and industrial virtual power plant (C&I VPP) platform from LS Power Equity Advisors in a deal valued at about $12bn.
The transaction involves a combination of cash and common stock. The enterprise value of the deal includes $6.4bn in cash, $2.8bn in stock consideration to LS Power, and $3.2bn of net debt assumed at closing.
The acquisition represents an acquisition multiple of 7.5 times the 2026 EV/EBITDA, or 50% of the estimated new build replacement cost.
The strategic move will see NRG Energy doubling its generation capacity by adding 18 natural gas-fired facilities, totalling approximately 13GW. These facilities are spread across nine states, enhancing NRG’s presence in the Northeast and Texas, where it primarily operates.
Additionally, NRG will acquire CPower, a C&I VPP platform with about 6GW of capacity, serving over 2,000 commercial and industrial customers in deregulated energy markets across the US.
The acquisition is set to increase NRG’s generation capacity to 25GW, integrating modern and flexible natural gas assets that are challenging to replicate.
NRG anticipates the acquisition will be immediately accretive to its adjusted earnings per share. Consequently, NRG has raised its long-term compounded annual growth rate target for adjusted earnings per share to at least 14%, up from the previous target of at least 10%.
The acquisition is expected to close in the first quarter of 2026, pending customary closing conditions and regulatory approvals from entities such as the Hart-Scott-Rodino Act, the Federal Energy Regulatory Commission, and the New York State Public Service Commission.
LS Power will retain approximately 10GW of electric generation capacity, including natural gas, renewables, and energy storage projects, along with its LS Power Grid platform, which operates over 780 miles of high-voltage transmission lines.
Citi and Goldman Sachs are leading the M&A advisory for NRG, with Scotiabank also advising. Citi and Goldman Sachs Bank USA are providing committed financing for the transaction.
Legal counsel for NRG is being provided by White & Case. LS Power’s lead financial advisor is Evercore, with additional advisory support from J.P. Morgan, Morgan Stanley, and Solomon Partners Securities.
Lazard and Harris Williams are advising LS Power on CPower, with legal counsel from Milbank and Willkie Farr & Gallagher.