NRG Energy Strikes $12B Deal to Acquire LS Power Assets
NRG Energy, Inc. (NRG) has agreed to a $12 billion enterprise value acquisition of a natural gas generation portfolio and a commercial and industrial (C&I) virtual power plant (VPP) platform from LS Power. The cash and stock deal significantly expands NRG’s energy portfolio and strengthens its market position.
The deal adds 18 natural gas-fired facilities with 13 GW of capacity across nine states, doubling NRG’s total generation capacity to 25 GW. The assets enhance NRG’s presence in key Northeast and Texas markets, where most of its load is located.
NRG is also acquiring CPower, a C&I VPP operating in all U.S. deregulated energy markets, with 6 GW of capacity serving over 2,000 commercial and industrial clients.
The deal structure comprises $6.4 billion in cash, $2.8 billion in stock (24.25 million NRG shares at a 10-day trailing VWAP of $114.98), $3.2 billion in assumed net debt, and a $400 million NPV of tax benefits. LS Power will hold an 11% stake in NRG post-transaction.
NRG anticipates the acquisition will immediately boost adjusted earnings per share (EPS). The deal supports an upward revision of NRG’s long-term adjusted EPS compounded annual growth rate target to at least 14%, from 10%, driven by sustained growth opportunities, excluding potential upside from data centers or tightening market pricing. Additionally, NRG plans to return approximately $9.1 billion to shareholders through share repurchases and dividends over the coming years.
Citi and Goldman Sachs & Co. LLC are serving as NRG’s lead M&A advisors. Scotiabank is also serving as M&A advisor to NRG. Citi and Goldman Sachs Bank USA are providing committed financing for the acquisition. White & Case LLP is serving as legal counsel to NRG.
Evercore is serving as lead financial advisor to LS Power. J.P. Morgan, Morgan Stanley & Co. LLC and Solomon Partners Securities, LLC, are serving as financial advisors to LS Power. With respect to CPower, Lazard is serving as lead financial advisor and Harris Williams is serving as financial advisor to LS Power. Milbank LLP and Willkie Farr & Gallagher LLP are serving as legal counsel to LS Power.