05:06 PM EDT, 04/14/2025 (MT Newswires) -- Capital Power ( CPXWF ) after trade Monday said it agreed to acquire two gas-fired generation plants within the Pennsylvania-New Jersey-Maryland Interconnection (PJM) regional transmission organization for US$2.2 billion and will pay in part for the purchase with a $500 million offering of shares,

The company said its purchase of the 1,124-megawatt Hummel Station in Pennsylvania and the 1,023-megawatt Rolling Hills plan in Ohio is expected to be immediately accretive to adjusted funds from operations per share. It also makes Capital Power ( CPXWF ) one of only five independent power producers with over ten gigawatts of gas-fired generation. It also gives the company a foothold in the PJM, largest and most liquid North American power market.

"Capital Power's ( CPXWF ) acquisition of Hummel and Rolling Hills expands our U.S. 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. These plants will bolster our Flexible Generation portfolio and align with our commitment to provide reliable, affordable power solutions," chief executive Avik Dey said.

The company said the acquisition reflects an attractive valuation of approximately seven times five-year (2026-2030) average EV/Adjusted EBITDA, a comparable valuation multiple to 2026E Adjusted EBITDA, the first full-year of operations after the acquisition, and below the average multiple CPX has paid on previous acquisitions of Flexible Generation assets.

Capital Power ( CPXWF ) expects the acquisition to generate average annual Adjusted EBITDA of approximately $443 million for the 2026-2030 period and to be, on average, approximately 17-19% accretive to AFFO per share over the same period, based on expected permanent financing, which exceeds the mid-to-high single digits accretion of Capital Power's ( CPXWF ) previous gas acquisitions.

Chief financial officer Sandra Haskins, said "Acquiring these high-quality assets aligns with our financial and strategic objectives as we execute on accretive growth opportunities that diversify our Flexible Generation fleet across North America, while maintaining our investment grade credit rating and balance sheet strength....The Hummel and Rolling Hills assets offer an attractive entry point in PJM."

Capital Power ( CPXWF ) said proceeds from its $500 million share offering will fully address the equity funding requirement for the acquisition. The remaining funding will be sourced from a combination of cash on hand from a prior equity issuance and asset divestitures, as well as longer-term debt financing; other immediately available funds, including potential draws under Capital Power's ( CPXWF ) existing credit facilities; and funding provided under Acquisition Term Loan Facilities.

The company said it has entered into a commitment letter dated April 14 with a Canadian chartered bank affiliate of TD Securities for fully underwritten $2-billion senior unsecured term loans. In addition, the company has access to $1 billion under its existing revolving credit facilities, which are currently undrawn. If drawn, repayment or refinancing of the facilities is expected through the issuance of senior notes and/or hybrid notes or other sources, subject to market conditions and other factors.

Capital Power ( CPXWF ) added this funding plan maintains its investment grade credit rating and preserves its strong balance sheet and financial flexibility.

The company's shares closed up $0.42 to $46.20 on the Toronto Stock Exchange.

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