Dynegy to acquire $6.25 billion assets from Duke Energy and Energy Capital Partners

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Dynegy to acquire $6.25 billion assets from Duke Energy and Energy Capital Partners

Dynegy Inc. has signed two separate definitive sets of agreements to acquire the ownership interests in certain Midwest generation assets from Duke Energy and EquiPower Resources Corp and Brayton Point Holdings, LLC from ECP.

  • The Duke portfolio includes its retail business and ownership interests in the following plants: Killen, Stuart, Conesville, Miami Fort, Zimmer, Hanging Rock, Washington, Fayette, Lee and Dicks Creek.
  • The ECP assets include these generating facilities: Milford, Lake Road, Dighton, Masspower, Liberty, Elwood, Richland, Stryker, Kincaid and Brayton Point.

Of the 12,500 MW being acquired, 5,053 MW are modern combined cycle natural gas plants and 3,793 MW are environmentally compliant coal generation plants. Upon closing both transactions, Dynegy will own nearly 26,000 MW of generating capacity nationally and provide retail electricity to residents and businesses in Illinois, Ohio, Pennsylvania and Michigan.

Transaction value is estimated at US$6.25 billion. Dynegy Inc. intends to issue approximately US$5 billion in new unsecured bonds and US$1.25 billion in equity and equity-linked securities.

Dynegy has provided estimated full year 2015 Adjusted EBITDA and Free Cash Flow guidance of $1.2-$1.4 billion and $480 - $680 million, respectively. This assumes that closing of both transactions occurs on December 31, 2014 and that Dynegy owns both portfolios for the full year of 2015.

Robert C. Flexon, Dynegy President and Chief Executive Officer, stated:

The addition of these portfolios is forecasted to significantly improve our financial outlook by tripling our 2015 Adjusted EBITDA and being massively accretive to Adjusted EBITDA and Free Cash Flow per share in 2015 and beyond.

Lazard and Credit Suisse acted as financial advisors on both transactions. Morgan Stanley acted as lead financial advisor on the ECP transaction and Goldman Sachs acted as financial advisor on the Duke transaction.

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