US-based Talen Energy has agreed to acquire Caithness Energy’s Moxie Freedom Energy Center in Pennsylvania and Caithness Energy and BlackRock’s Guernsey Power Station in Ohio for $3.5bn.
Both combined-cycle gas-fired plants are located within the PJM power market. Talen anticipates the transaction will boost free cash flow per share by over 40% in 2026 and more than 50% through 2029.
The acquisition will enhance Talen’s portfolio with modern, high-efficiency H-Class combined-cycle gas turbines (CCGTs), increasing its annual generation capacity by 50% from 40TWh to 60TWh.
The plants, with an average heat rate of 6,550 Btu/kWh, are strategically located with access to Marcellus and Utica shale gas reserves.
The acquisition also strengthens Talen’s platform for data centre and large-load contracting, offering low-carbon capacity to meet the demands of hyperscale data centres and other large commercial clients.
It is expected to maintain Talen’s balance sheet strength, with a commitment to a leverage target of 3.5x or lower by the end of 2026.
Talen Energy president and CEO Mac McFarland said: “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 centre 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.”
To finance the acquisitions and refinance existing debt, Talen plans to issue approximately $3.8bn in new debt, using both secured and unsecured instruments.
The transactions are anticipated to close in the fourth quarter of 2025, pending customary closing conditions and regulatory approvals.
Additionally, Talen will acquire equity interests in Guernsey held by Global Infrastructure Partners, a part of BlackRock.
RBC Capital Markets and Citi are serving as co-lead financial advisors to Talen, with Kirkland & Ellis and White & Case providing legal counsel. Cahill Gordon & Reindel is advising RBC Capital Markets and Citi.
Caithness is being advised by Lazard, with Paul Hastings as legal counsel. Morgan Stanley & Co. and Simpson Thacher & Bartlett are advising Global Infrastructure Partners.
