NRG Energy Stock Soars 25% On $12B Deal With LS Power To Acquire Natural Gas Generation Facilities
Synopsis
CEO Larry Coben said the transaction is financially compelling as it strengthens the company’s credit profile, boosts its growth rate, and supports continued robust capital returns.
Shares of NRG Energy (NRG) soared 25% on Monday after the company announced the acquisition of natural gas generation facilities and a commercial and industrial virtual power plant platform from LS Power for an enterprise value of $12 billion.
The company said the deal value represents an acquisition multiple of 7.5x 2026 EV/EBITDA (ratio of enterprise value to earnings before interest, tax, depreciation, and amortization), or 50% of the estimated new build replacement cost.
The deal will allow NRG Energy to double its generation capacity by adding 18 natural gas-fired facilities totaling approximately 13 gigawatts (GW). The acquisition is expected to close in the first quarter (Q1) of 2026.
CEO Larry Coben said the transaction is financially compelling as it strengthens the company’s credit profile, boosts its growth rate, and supports continued robust capital returns.
Under the terms of the deal, LS Power is expected to own approximately 11% of the pro forma NRG shares outstanding. The firm has also committed to a 6-month lock-up period regarding its equity ownership of NRG common stock.
The enterprise value comprises $6.4 billion of cash consideration, $2.8 billion in stock consideration to LS Power, $3.2 billion of net debt assumed at closing, less approximately $0.4 billion of the NPV (net present value) of tax benefits generated directly as a result of the transaction.
Meanwhile, the company also announced its first-quarter (Q1) earnings on Monday. Revenue rose 16% year-on-year (YoY) to $8.59 billion, surpassing a Wall Street estimate of $8.28 billion. Adjusted earnings per share (EPS) stood at $2.68 compared to an estimated $1.62.
The company reaffirmed its 2025 guidance for adjusted net income of $1.33 billion to $1.53 billion and adjusted EPS of $6.75 to $7.75.
NRG shares have gained over 61% in 2025 and 81% in the past 12 months.
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