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Here's Why Dynegy Rose 8%

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Shares of Dynegy Inc. (NYSE: DYN), a power generation company, spiked higher by more than 8 percent on Thursday after the company announced the formation a joint venture with Energy Capital Partners to acquire ENGIE's U.S. Fossil Portfolio.

The joint venture will operate under the name Atlas Power. Dynegy will initially invest $770 million in the joint venture and Energy Capital Partners will invest $415 million.

As part of the agreement, the new joint venture will acquire ENGIE's portfolio which consists of 8,731 megawatts of generation capacity, including 8,044 MW of natural gas-fired generation, for $3.3 billion.

Dynegy noted the acquisition will generate $90 million in targeted annual synergies. The company will own 65 percent of the joint venture and will be responsible for the day-to-day management and operation of the entity.

"Today's acquisition continues Dynegy's transformation that began in 2011, to build a long term sustainable portfolio in key competitive markets. This transaction is a compelling value for our shareholders as it is the right assets, in the right markets, at the right price and unlocks considerable synergy value by utilizing our proven integration model and corporate platform," said Robert C. Flexon, President and CEO of Dynegy. "We partnered on this transaction with Energy Capital in order to minimize Dynegy's equity issuance and manage balance sheet risk as access to credit markets remain exceedingly tight and in some instances unavailable. Partnering with Energy Capital, a leading and highly reputable private equity firm with whom we historically have had a very strong and positive relationship, allowed us to bring our strengths together to accomplish this acquisition that otherwise could not have been achieved by either party individually."

Posted-In: dynegy Energy Capital Partners energy companies ENGIE Robert FlexonNews Movers

 

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