Talen Energy to Acquire PJM Gas-Fired Power Plants for $3.45 Billion
Talen Energy has agreed to acquire 2.6 GW of gas-fired generation in the PJM market for $3.45 billion, expanding its Ohio and Indiana footprint and positioning the company for growing data center power demand.
(P&GJ) — Talen Energy Corporation has signed definitive agreements to acquire approximately 2.6 GW of natural gas–fired generation capacity in the PJM market for $3.45 billion, expanding its footprint in Ohio and Indiana.
The deal includes the Waterford Energy Center and Darby Generating Station in Ohio, along with the Lawrenceburg Power Plant in Indiana, acquired from Energy Capital Partners. Talen said the acquisition significantly strengthens its presence in western PJM and adds efficient baseload capacity to its fleet.
The purchase price consists of about $2.55 billion in cash and roughly $900 million in Talen stock, valuing the transaction at an estimated 6.6x 2027E adjusted EBITDA. The company expects the acquisition to be immediately accretive to adjusted free cash flow per share by more than 15% annually through 2030.
“This acquisition further diversifies Talen’s generation portfolio by adding both baseload capacity and strong cash flow contribution and enhances our presence in the western PJM market, which has significant data center tailwinds,” said Mac McFarland, Talen chief executive officer. “The transaction is immediately cash flow accretive and maintains our balance sheet discipline. Following on the heels of our acquisition of Freedom and Guernsey in 2025, it is another great example of our ‘Talen flywheel’ strategy.”
The Lawrenceburg (1,218 MW) and Waterford (869 MW) plants are combined-cycle gas turbines with average heat rates of about 7,000 Btu/kWh and capacity factors exceeding 80%. Darby, a 480-MW facility, operates as a peaking unit, providing additional operational flexibility. All three plants have access to Marcellus and Utica shale gas supplies.
“When this transaction is complete, Talen will have approximately doubled its expected annual generation output inside of two years, meaningfully diversified our fleet, and materially increased our free cash flow per share,” said Terry Nutt, Talen president. “We are also excited to welcome ECP as a significant Talen shareholder.”
ECP will receive approximately $900 million of the purchase price in Talen equity, becoming a significant shareholder after closing.
“ECP invested in this portfolio to serve rapid load growth in the Ohio region with efficient, baseload natural gas assets; we continue to believe this is PJM's most exciting narrative,” said Andrew Gilbert, ECP partner. “Talen has demonstrated that its platform of scale is uniquely positioned to serve PJM’s large customers and, with this transaction, will only be better positioned to do so.”
Talen expects to fund the cash portion of the acquisition with new debt and said strong pro forma cash flows should support rapid deleveraging, targeting net leverage of 3.5x or lower by the end of 2026.
The transaction is expected to close in early second-half 2026, subject to regulatory approvals, including clearance from the Federal Energy Regulatory Commission, the Indiana Utility Regulatory Commission and review under the Hart-Scott-Rodino Act.