NRG Energy Inc. and LS Power Equity Advisors, LLC announced that they have entered into a definitive agreement under which NRG will acquire a portfolio of natural gas generation facilities and a commercial and industrial virtual power plant (C&I VPP) platform from LS Power in a cash and common stock transaction valued at approximately $12 billion Enterprise Value, representing an acquisition multiple of 7.5x 2026 EV/EBITDA, or 50% of estimated new build replacement cost.
This acquisition doubles NRG’s generation capacity with the addition of 18 natural gas-fired facilities totaling approximately 13 GW. These facilities, located across nine states, expand NRG’s generation footprint in the Northeast and Texas, where most of its load is located. In addition, NRG is acquiring CPower, a leading C&I VPP platform. CPower operates in all the country’s deregulated energy markets and has approximately 6 GW of capacity representing more than 2,000 commercial and industrial customers.
“This acquisition transforms NRG’s generation fleet and broadens our customized product offerings, enhancing our ability to bring the future of energy to millions of customers across the U.S.,” said Larry Coben, NRG Chair, President & Chief Executive Officer. “The transaction is financially compelling as it strengthens our credit profile and turbocharges NRG’s growth rate, while also supporting continued robust capital returns. We are in the early stages of a power demand supercycle, and we are excited to lead the way with reliable energy solutions that will drive considerable value for NRG and all of our stakeholders.”
“This transaction is a significant milestone for our firm and investors,” said Paul Segal, Chief Executive Officer of LS Power. “Over time, LS Power has carefully assembled, expanded, redeveloped, repositioned, and operated this generation portfolio, which is uniquely situated to meet the growing energy demand in the markets it serves. In the capable hands of the NRG team, these projects, along with CPower, will continue to provide critical services to the grid, enhancing both its resilience and affordability. As we have since our founding in 1990, LS Power will continue to invest in and develop secure and reliable energy infrastructure across the U.S.”
Transforms NRG’s generation fleet with irreplicable, high-quality assets in core markets
The acquisition will double NRG’s generation capacity to 25 GW, adding modern, flexible natural gas assets that cannot be replicated. These new quick-start facilities, serving the Northeast and Texas markets, optimize NRG’s ability to serve customers, simplify risk management, and lower cost-to-serve.
Immediately and highly accretive with compelling 5-year outlook
The acquisition is expected to be immediately accretive to NRG’s Adjusted Earnings Per Share. Given the visible, sustained growth expected to be created by the acquisition, NRG is increasing its stated long-term compounded annual growth rate (CAGR) target for Adjusted Earnings per Share to at least 14%, from the current at least 10% target, without including upside opportunities such as data centers or increased pricing from tightening markets. NRG expects to return approximately $9.1 billion of capital to NRG shareholders through share repurchases and common dividends over this period.
Creates optionality and boosts upside opportunities from the power market supercycle
After the transaction, NRG will have a larger, more flexible platform across core Northeast and Texas markets, increasing NRG’s asymmetric gearing to tightening supply and large load demand growth.
The acquisition expands NRG’s capabilities to serve rapidly growing demand for tailored, long-term supply solutions for customers – particularly data centers. It also enhances NRG’s additionality offerings through 1+ GW of potential uprates, additional sites for potential development or colocation opportunities, and a differentiated C&I VPP platform.
Enhanced credit profile reinforces financial strength
NRG will maintain a strong balance sheet, with its current credit ratings expected to be affirmed by S&P, Moody’s, and Fitch. Following the acquisition, NRG’s enhanced credit profile supports an increase in its target investment-grade leverage ratio to below 3.0x Net Debt to Adjusted EBITDA, from currently stated target range of 2.50x to 2.75x. The Company expects robust pro forma cash flows to drive rapid deleveraging and is committed to achieving its target leverage ratio within 24 to 36 months following closing.
Value-creating capital allocation continues, including capital returns and strategic investments
The acquisition meaningfully exceeds NRG’s stated hurdle rates of 12-15% unlevered, pre-tax. NRG remains committed to substantial and consistent capital return, including significant annual share repurchases and 7-9% annual dividend per share growth, while prioritizing a strong balance sheet. NRG expects to execute $1 billion in annual share repurchases until it reaches its < 3.0x leverage target, after which it expects to return to its 80/20% capital allocation framework.
For 2025, the Company reiterates its previously announced capital allocation plan of $1.3 billion in share repurchases and common stock dividends of approximately $345 million.
The transaction Enterprise Value of approximately $12 billion is comprised of $6.4 billion of cash consideration, $2.8 billion in stock consideration to LS Power (24.25 million shares of NRG stock using the 10-day trailing VWAP of $114.98), $3.2 billion of net debt assumed at closing, less approximately $0.4 billion of the NPV of tax benefits generated directly as a result of the transaction. The transaction is not expected to trigger any change of control provisions under such assumed debt.
LS Power is expected to own approximately 11% of the pro forma NRG shares outstanding and has committed to a 6-month lock-up period with respect to its equity ownership of NRG common stock. LS Power’s election to receive NRG shares for approximately 23% of the purchase price, which is equivalent to 30% of its net consideration after debt assumption, reflects a strong conviction in NRG’s post-acquisition value. A portion of LS Power’s shares will be held in a voting trust such that it will control less than 10% of the overall voting rights of NRG stock at all times.
The acquisition is expected to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals including Hart-Scott-Rodino (HSR), Federal Energy Regulatory Commission (FERC), and the New York State Public Service Commission (NYSPSC).
