Canada-based energy company TransAlta has entered into a purchase and sale agreement to acquire two natural gas-fired power plants located near Denver, Colorado, for a combined consideration of $1 billion (approximately C$1.39 billion). The two assets the 162MW Mountain Peak Power and the 156MW Canyon Peak Power are both indirect subsidiaries of Blackstone, and together represent a combined generating capacity of 318MW.
The transaction involves the assumption of $750 million in senior secured project debt along with $250 million in equity. To fund the cash component of the deal, TransAlta has launched a concurrent C$350 million bought deal common share offering, which involves the issuance of 18.2 million common shares priced at C$19.20 per share. The equity offering is being underwritten by CIBC Capital Markets and RBC Capital Markets, with closing expected on or around 9 June 2026, subject to customary approvals.
TransAlta projects that the Colorado gas plants acquisition will contribute approximately $80 million in adjusted earnings before interest, taxes, depreciation and amortisation on an annual basis, along with free cash flow of around $33 million per year. The company also noted the potential for further increases through availability incentive payments. The deal is expected to deliver immediate low-to-mid single-digit accretion to free cash flow per share.
Mountain Peak Power has been operational since September 2025, while Canyon Peak Power is expected to reach commercial service in the third quarter of 2026. Both Colorado gas plants are secured under long-term tolling agreements with investment-grade customers for more than 25 years, with full pass-through provisions covering fuel, operations and maintenance, and capital costs a structure that significantly reduces operational risk for TransAlta.
TransAlta president and CEO Joel Hunter commented on the deal, stating: “This acquisition adds new, high-quality, low-risk assets in a core market for us. It strengthens our business risk profile, is immediately accretive to our free cash flow per share and establishes a strategic foothold in Colorado, a state we believe has accelerating growth potential.”
Hunter further noted: “These assets will generate long-term contracted cash flows for redeployment into other growth prospects such as Centralia and Alberta data centres, and I am pleased with the continued meaningful progress on both projects.”
Completion of the natural gas acquisition remains contingent on Canyon Peak Power achieving commercial operation status and on receiving customary regulatory approvals. TransAlta expects to close the purchase early in the fourth quarter of 2026.