Dynegy Completes Acquisition of ENGIE’s U.S. Portfolio
February 07 2017 - 12:07PM
Business Wire
--Bolsters Dynegy’s Position as the Premier,
Low-Cost Independent Power Producer--
Dynegy Inc. (NYSE: DYN) today completed its acquisition of
ENGIE’s United States portfolio for a total purchase price of $3.3
billion.
The portfolio consists of 9,017 megawatts (MW) of generation
capacity, more than 90% of which is gas-fueled. The plants are
located in the Texas ERCOT, PJM and ISO-New England markets, the
best and most competitive power markets in the country. The
addition of the ENGIE asset portfolio enhances the Company’s
strategy of driving efficiencies to become the low-cost industry
leader. Dynegy now owns more than 31,000 MW of low-cost generating
capacity—enough to power 25 million homes.
“Since 2013, we have transformed Dynegy’s fuel and geographic
asset mix and increased our fleet longevity through a series of
acquisitions, tripling our capacity in just a few short years,”
said Robert C. Flexon, Dynegy President and CEO. “The ENGIE
acquisition adds strategic assets in key markets and leverages our
low-cost scalable operating platform, furthering our position as
the low-cost operator among our peers.” The ENGIE transaction adds
efficient assets that enhance Dynegy’s existing portfolio in PJM
and ISO New England, and diversifies the Company’s geographic
markets by establishing a new presence in the Texas ERCOT market.
The predominantly gas-fueled ENGIE portfolio increases Dynegy’s
overall natural gas-fueled capacity to nearly 2/3 of our total
generation.
TRANSACTION SYNERGIES
Dynegy will leverage its scale and proven approach to
integration and synergy achievement to maximize the value of
transaction. The Company’s integration will be swift with the
majority of our initial $90 million synergy target to be achieved
within the first 30 days of closing. An updated and increased
synergy target will be announced in the near future. The synergies
are primarily derived from operations and maintenance, procurement
and the elimination of redundant corporate platform costs.
TRANSACTION TERMS AND BOARD APPOINTMENT
As previously announced, pursuant to the closing of the
transaction, Dynegy acquired ECP’s 35% interest in the joint
venture, and owns 100% of the acquired business. Dynegy has assumed
ECP’s share of the upfront equity funding at closing, and paid ECP
the revised discounted floor price of $375 million post-closing.
This step allows Dynegy to reduce the cost of the acquisition and
accelerate the full integration of the ENGIE portfolio into the
Company’s existing business.
In connection with the terms of the transaction with ECP, the
Dynegy Board of Directors has named Tyler Reeder as a
representative from ECP to its Board. ECP has the right to appoint
one director to the Board so long as its common stock ownership in
Dynegy is at least 10%. Mr. Reeder is a Partner of Energy Capital
Partners. Prior to joining Energy Capital in 2006, he was a member
of the Texas Genco, LLC management team until the sale of the
company to NRG Energy in 2006. While at Texas Genco, Mr. Reeder was
the head of the asset optimization desk and managed the generation
portfolio’s power and fuel positions. From 1998 to 2002, he was a
Director for Energy Markets and a Finance Manager at Orion Power
Holdings, Inc., where he was responsible for power marketing,
transaction analysis and execution. From 1996 to 1998, he worked at
Goldman Sachs. Mr. Reeder received a B.A. in Economics from
Colgate University.
NEWLY ACQUIRED GENERATING ASSETS
PLANT LOCATION
MARKET
NET CAPACITY(MW)
OWNERSHIPINTEREST
PRIMARYFUEL Coleto Creek Goliad, TX
ERCOT 635
100% Coal Ennis Ennis, TX
ERCOT 370
100% Gas Hays San
Marcos, TX ERCOT 1,107
100% Gas Midlothian
Midlothian, TX ERCOT
1,712 100%
Gas Wharton Boling, TX
ERCOT 85 100%
Gas Wise Poolville, TX
ERCOT 787
100% Gas Bellingham
Bellingham, MA ISO-NE
566 100% Gas
Bellingham NEA Bellingham, MA
ISO-NE 157 50%
Gas Blackstone
Blackstone, MA ISO-NE 544
100% Gas Milford
Milford, MA ISO-NE
171 100% Gas
Armstrong Shelocta, PA
PJM 753 100%
Gas Calumet Chicago, IL
PJM 380
100% Gas Hopewell
Hopewell, VA PJM 370
100% Gas Northeastern
McAdoo, PA PJM
52 100%
Coal Pleasants Saint Marys, WV
PJM 388 100%
Gas Sayreville
Sayreville, NJ PJM 170
50% Gas Troy
Luckey, OH PJM
770 100% Gas
ABOUT DYNEGY
At Dynegy, we generate more than just power for our
customers. We are committed to being a leader in the electricity
sector. Throughout the Northeast, Mid-Atlantic, Midwest and
Texas, Dynegy operates power generating facilities
capable of producing enough energy to power about 25 million
American homes. We’re proud of what we do, but it’s about much more
than just output. We’re always striving to generate power safely
and responsibly for our wholesale and retail electricity customers
who depend on that energy to grow and thrive.
FORWARD-LOOKING STATEMENT
This news release contains statements reflecting assumptions,
expectations, projections, intentions or beliefs about future
events that are intended as “forward-looking statements”
particularly those statements concerning: Dynegy’s strategy
enhancements; Dynegy being the low-cost operator among peers; the
ISO-New England, PJM and Texas ERCOT markets and the anticipated
benefits associated with such markets; and the anticipated
synergies resulting from the acquisition and the timing to achieve
such synergies. Discussion of risks and uncertainties that could
cause actual results to differ materially from current projections,
forecasts, estimates and expectations of Dynegy is contained in
Dynegy’s filings with the Securities and Exchange Commission (the
SEC). Specifically, Dynegy makes reference to, and incorporates
herein by reference, the section entitled “Risk Factors” in its
2015 Form 10-K and subsequent Forms 10-Q. In addition to the risks
and uncertainties set forth in Dynegy’s SEC filings, the
forward-looking statements described in this press release could be
affected by, among other things, (i) problems may arise in
successfully integrating the ENGIE portfolio power facilities into
Dynegy’s current portfolio, which may result in Dynegy not
operating as effectively and efficiently as expected; (ii) Dynegy
may be unable to achieve expected synergies or it may take longer
than expected to achieve such synergies; (iii) the transaction may
involve unexpected costs or unexpected liabilities; (iv) the
industry may be subject to future regulatory or legislative
actions, including environmental, that could adversely affect
Dynegy; and (v) Dynegy may be adversely affected by other economic,
business, and/or competitive factors. Any or all of Dynegy’s
forward-looking statements may turn out to be wrong. They can be
affected by inaccurate assumptions or by known or unknown risks,
uncertainties and other factors, many of which are beyond Dynegy’s
control.
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Dynegy Inc.Media:David Onufer, 713-767-5800orAnalysts:
713-507-6466
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