Vistra Corp. (NYSE: VST) has announced its plans to acquire the entire 15% equity interest in Vistra Vision LLC currently owned by affiliates of Nuveen Asset Management, LLC, and Avenue Capital Management II, L.P. The net present value cash purchase price for this acquisition, expected to close on December 31, 2024, is $3.085 billion. This purchase is subject to adjustment based on the amount of Vistra Vision dividends received by the minority investors prior to closing.
The transaction is expected to significantly exceed the company’s mid-teens levered return thresholds and is forecasted to be immediately accretive to shareholders. Vistra remains committed to its long-term net leverage target of less than 3x and plans to execute at least $2.25 billion of share repurchases in 2024 and 2025, and at least $1 billion of additional share repurchases in 2026.
Vistra President and CEO Jim Burke stated that this transaction is a key milestone in the company's evolution and will result in Vistra becoming the sole owner of its Vistra Vision subsidiary. This includes zero-carbon nuclear, energy storage, and solar generation assets, as well as its retail business.
The transaction structure involves Vistra paying a total undiscounted purchase price of $3.248 billion in cash, which will be paid in installments over two years from the closing date. The net present value of the purchase price as of December 31, 2024, discounted at a 6% interest rate, is $3.085 billion. Additionally, the agreement does not impact or change Vistra’s capital allocation priorities, and the company remains committed to its long-term net leverage target and capital allocation plan.
The transaction, not subject to any regulatory approvals, is expected to close on December 31, 2024. Citi is serving as the financial advisor, and Latham & Watkins LLP and Sidley Austin LLP are serving as legal advisors to Vistra. Evercore and PJT Partners are serving as financial advisors, and Kramer Levin Naftalis & Frankel LLP is serving as legal advisor to Nuveen and Avenue.
Assets owned by Vistra Vision LLC include the Beaver Valley, Comanche Peak, Davis-Besse, and Perry nuclear generation facilities with a total capacity of approximately 6.4 GW, the Vistra Zero Renewables and Energy Storage business, and Vistra’s retail business. As of June 30, 2024, total debt outstanding and cash on hand at Vistra Vision LLC were approximately $3.55 billion and $375 million, respectively.
Vistra is a leading Fortune 500 integrated retail electricity and power generation company based in Irving, Texas, with a focus on reliability, affordability, and sustainability. Following these announcements, the company's shares moved 0.5%, and are now trading at a price of $112.19. Check out the company's full 8-K submission here.
