TransAlta Announces the Acquisition of Two Fully-Contracted Gas Assets in Colorado and Concurrent $350 Million Bought Deal Offering of Common Shares
TransAlta Piles Into US Gas Peaking With $1B Colorado Deal, Taps Equity Markets With $350M Bought Deal
TransAlta Corporation announced the acquisition of Mountain Peak Power LLC (162 MW) and Canyon Peak Power LLC (156 MW)—two natural gas-fired peaking plants near Denver, Colorado—from Blackstone, Inc. for a total transaction value of US$1.0 billion. The deal includes assumption of US$750 million in non-recourse, project-level senior secured debt (investment-grade, 6.2% coupon, fully amortizing) and a US$250 million equity component. To fund the equity, TransAlta is undertaking a concurrent $350 million bought deal offering of 18.2 million common shares priced at $19.20 per share (with a 15% over-allotment option). The assets are 100% contracted with investment-grade off-takers (United Power, A rated, 30 years; CORE Electric Cooperative, AA- rated, 25 years) under fixed capacity payments with full pass-through of costs. The acquisition adds ~US$80 million in annual Adjusted EBITDA and ~US$33 million in annual Free Cash Flow, and is immediately accretive to FCF per share (low-to-mid single-digit). Canyon Peak is expected to achieve commercial operations in Q3 2026, and closing is targeted for early Q4 2026. The acquisition establishes a strategic physical foothold in the core Western U.S. geography and strengthens the business risk profile.
This news is genuinely new and market‑moving. The acquisition materially expands TransAlta’s fleet with high‑quality, fully contracted peaking assets in a new core jurisdiction (Colorado), representing a US$1.0 billion transaction against a company with a ~$5.9 billion CAD market cap. The concurrent bought deal, while dilutive, is priced at a modest 3.2% discount to the prior close and is specifically earmarked for the equity component; the accretion to FCF per share offsets dilution in the near term. The transaction aligns with management’s stated priority to pursue strategic M&A and redeploy cash flows into growth, but its size and immediate foothold in the U.S. beyond the Pacific Northwest are a clear positive surprise that was not fully priced in. The 25+ year contracted cash flows also reduce merchant exposure, addressing a key risk highlighted in prior quarters. Overall, the news is materially positive and adds significant long‑term stable cash flow, though the offering may temper immediate price gains.
TransAlta Corporation is a Canadian independent power producer with a diversified fleet of hydro, wind, solar, natural gas, and energy‑transition assets across Canada, the United States, and Australia. Its two flagship growth projects are: 1. Centralia Unit 2 conversion (Washington): A 700 MW coal‑to‑natural‑gas conversion backed by a 16‑year tolling agreement with Puget Sound Energy (signed December 2025). Project capex is ~US$600 million with a 5.5x build multiple; FID targeted for early 2027 and commercial operation by late 2028. 2. Alberta data centre development: A Memorandum of Understanding with CPP Investments and Brookfield to develop a data centre campus at the Keephills site, initially for 230 MW under a long‑term PPA, with potential expansion up to 1 GW. The project leverages existing infrastructure and land.
The company also recently acquired a 310 MW Ontario gas portfolio (Far North Power) for $95 million, consolidating its position in the province.