Vistra to buy Cogentrix Energy’s 5.5 GW of gas plants in $4B deal

Core Viewpoint - Vistra has announced the acquisition of Cogentrix Energy for approximately $4 billion, which includes a 5.5 GW portfolio of natural gas generation facilities [1][3]. Group 1: Acquisition Details - The acquisition encompasses three combined cycle gas turbine facilities and two combustion turbine facilities in PJM, four combined cycle gas turbine facilities in ISO New England, and one cogeneration facility in ERCOT [2]. - The deal structure consists of $2.3 billion in cash, $900 million in Vistra stock, and the assumption of $1.5 billion in Cogentrix debt, offset by around $700 million in expected tax benefits [3]. Group 2: Financing and Strategic Rationale - Goldman Sachs is set to provide up to approximately $2 billion in senior secured bridge loans to finance the acquisition, along with associated fees and expenses [4]. - The acquisition is viewed as a strategic move to expand Vistra's generation footprint and meet growing customer demand in key markets, following a previous acquisition of 2.6 GW of natural gas capacity [4]. Group 3: Market Insights and Analyst Commentary - Analysts have described the Cogentrix deal as attractively priced, indicating that it leverages the balance sheet to create value and diversifies Vistra's presence in the attractive ISO-NE power market [5]. - The increase in the acquisition price since Quantum Capital Group's purchase in August 2024 reflects a significant improvement in power and capacity value, although regulatory review uncertainties have been noted [6].