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[Enterprising Investor]

Vistra to Acquire Equity Interests of Vistra Vision LLC from Minority Investors (9/18/24)

Vistra to become the sole owner of Vistra Vision

Highlights

- Transaction, consisting of the acquisition of the entire 15% equity interest in Vistra Vision currently owned by affiliates of Nuveen and Avenue, is expected to close on Dec. 31, 2024.

- Net present value cash purchase price, which will be paid in installments over two years from the closing date, of $3.085 billion(1), subject to adjustment based on the amount of Vistra Vision dividends received by the minority investors prior to closing.

- Increases upside related to nuclear, solar, and battery assets, as well as its retail business currently majority owned and operated by Vistra.

- 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(2) and continues to expect 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(3).

IRVING, Texas, Sept. 18, 2024 /PRNewswire/ -- Vistra Corp. (NYSE: VST) today announced that it has executed definitive agreements with affiliates of Nuveen Asset Management, LLC, and Avenue Capital Management II, L.P., to acquire their combined 15% equity interest in Vistra Vision LLC. This will result in Vistra being the sole owner of its Vistra Vision subsidiary, which includes its zero-carbon nuclear, energy storage, and solar generation assets, as well as its retail business.

Vistra President and CEO Jim Burke stated, "This is another key milestone in the evolution of our company. Through this transaction we are simplifying the overall structure by acquiring the minority interest at an attractive valuation and increasing our shareholder's ownership to 100% of highly valuable, carbon-free assets in the key growing markets across the U.S."

Burke concluded, "Vistra believes its strength is its integrated model of pairing a large fleet of dispatchable generation assets with best-in-class retail and commercial operations, ensuring customers are served in a reliable, affordable, and sustainable manner. Vistra continues to be well-positioned to assist with the growing power needs across our country."

Transaction Structure

Vistra will acquire the 15% equity interest collectively owned by Nuveen and Avenue for an undiscounted purchase price of $3.248 billion in cash, which it expects to pay in five installments of $1.18 billion on Dec. 31, 2024, $114 million on June 30, 2025, $1.0 billion on Dec. 31, 2025, $54 million on June 30, 2026, and $900 million on Dec. 31, 2026. The net present value of the purchase price as of Dec. 31, 2024, discounted at a 6% interest rate, is $3.085 billion.

Additionally, if Nuveen and Avenue receive less than $165 million in dividends from Vistra Vision for the remainder of 2024, then the amount of the installment payable on Dec. 31, 2024, will be adjusted upward by the difference, and if they receive dividends in excess of $165 million, then the amount will be adjusted downward by the difference.

Vistra's Capital Allocation Plan Unchanged

The agreement does not impact or change Vistra's capital allocation priorities. Vistra remains committed to its long-term net leverage target of less than 3x2. Vistra also continues to expect to execute at least $2.25 billion of share repurchases in 2024 and 2025 and at least $1 billion in 20263, as well as pay $300 million in aggregate common dividends in each year 2024-20263.

Conditions and Timing

The transaction, which is not subject to any regulatory approvals, is expected to close on Dec. 31, 2024.

Advisors

Citi is serving as 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.

About Vistra Vision LLC

Assets owned by Vistra Vision LLC consist of the Beaver Valley, Comanche Peak, Davis-Besse, and Perry nuclear generation facilities with 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.

About Vistra

Vistra (NYSE: VST) is a leading Fortune 500 integrated retail electricity and power generation company that provides essential resources to customers, businesses, and communities from California to Maine, including the key markets of ERCOT, PJM and ISO New England. Based in Irving, Texas, Vistra is a leader in the energy transformation with an unyielding focus on reliability, affordability, and sustainability. The company safely operates a reliable, efficient, power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities while taking an innovative, customer-centric approach to its retail business. Learn more at https://www.vistracorp.com.

(1) Calculated as of Dec. 31, 2024, utilizing a 6% discount rate.

(2) Excluding any non-recourse debt at Vistra Zero and any benefit from margin deposits.

(3) Subject to board authorization.

https://www.prnewswire.com/news-releases/vistra-to-acquire-equity-interests-of-vistra-vision-llc-from-minority-investors-302252376.html