Capital Power, through its indirect wholly-owned subsidiary, has agreed to acquire two natural gas facilities from subsidiaries of LS Power Equity Advisors for $2.2bn.
The transaction includes the acquisition of all equity interests in Hummel Station, which operates the 1,124MW Hummel Station in Shamokin Dam, Pennsylvania, and Rolling Hills Generating, which owns the 1,023MW Rolling Hills plant in Wilkesville, Ohio.
The acquisition is scheduled to be finalised in the third quarter of 2025, contingent on regulatory approvals and other customary closing conditions.
Upon completion, Capital Power will emerge as one of the top five independent power producers in North America, boasting over 10 GW of natural gas capacity.
This move aligns with Capital Power’s strategy to expand its portfolio of Flexible Generation assets and strengthen its presence in the US and PJM market.
Capital Power intends to utilise its expertise in plant operations and power trading to maximise the commercial potential of these assets, contributing to long-term value within its broader operational fleet.
The company anticipates the acquisition will generate an average annual Adjusted EBITDA of approximately $443m from 2026 to 2030.
Additionally, it expects the acquisition to enhance AFFO per share by approximately 17-19% over the same period, surpassing the accretion levels of previous gas acquisitions.
Capital Power president and CEO Avik Dey said: “Capital Power’s acquisition of Hummel and Rolling Hills expands our US generation fleet and advances our position as a leading North American power producer.
“With our expansion into the largest and most liquid power market in North America, we continue to deliver on our strategy.”
Dey added: “These plants will bolster our Flexible Generation portfolio and align with our commitment to provide reliable, affordable power solutions that support a balanced approach to the energy expansion.
“As a leading operator in North America, our ability to integrate these assets, optimise performance and enhance returns through our robust trading platform underpins the long-term value we expect these acquisitions will provide for our shareholders.”
Evercore is serving as the sole M&A financial advisor to Capital Power, with TD Securities providing financial advice and Simpson Thacher & Bartlett acting as legal advisor for the acquisition.
