Vistra has announced definitive agreements to acquire a 15% equity interest in its subsidiary Vistra Vision from affiliates of Nuveen Asset Management and Avenue Capital Management II LP.
The move will consolidate Vistra’s ownership, making it the sole proprietor of Vistra Vision.
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The assets owned by Vistra Vision comprise the Comanche Peak, Beaver Valley, Davis-Besse and Perry nuclear generation facilities with a total capacity of 6.4GW, the Vistra Zero renewables and energy storage business and Vistra’s retail business.
The deal will close on 31 December 2024 and does not require regulatory approvals.
Vistra president and CEO Jim Burke stated: “This is another key milestone in the evolution of our company. Through this transaction, we are simplifying the overall structure by acquiring the minority interest at an attractive valuation and increasing our shareholder’s ownership to 100% of highly valuable, carbon-free assets in the key growing markets across the US.”
The transaction, valued at an undiscounted purchase price of $3.248bn in cash, is structured in five instalments, with the first payment of $1.18bn due on 31 December 2024.
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By GlobalDataThe net present value of the purchase price, discounted at a 6% interest rate, is $3.085bn as of 31 December 2024.
Adjustments to the installment payments to Nuveen Asset Management and Avenue Capital Management II LP will be made based on the dividends received from Vistra Vision for the remainder of 2024.
Burke highlighted the company’s strengths, stating: “Vistra believes its strength is its integrated model of pairing a large fleet of dispatchable generation assets with best-in-class retail and commercial operations, ensuring customers are served in a reliable, affordable and sustainable manner. Vistra continues to be well-positioned to assist with the growing power needs across our country.”
The acquisition will not alter Vistra’s capital allocation priorities, as the company remains committed to its long-term net leverage target of less than times three.
Vistra also maintains its plan to execute at least $2.25bn of share repurchases in 2024 and 2025, and at least $1bn in 2026, as well as paying $300m in aggregate common dividends annually from 2024 to 2026.
Citi is acting as the financial advisor, while Latham & Watkins and Sidley Austin are providing legal counsel to Vistra.
Nuveen and Avenue have appointed Evercore and PJT Partners as their financial advisors, with Kramer Levin Naftalis & Frankel serving as their legal advisor.
In July 2024, Vistra secured a licence extension for its 2.4GW Comanche Peak nuclear power plant. This extension will allow the plant to continue operations until 2053.
