TransAlta Corporation (TSX: TA) (NYSE: TAC) announced the acquisition of two natural gas peaking facilities in Colorado for US$1 billion and a concurrent $350 million equity offering to fund the purchase.

The Calgary-based power generator will acquire Mountain Peak Power LLC and Canyon Peak Power LLC from subsidiaries of Blackstone Inc. The facilities total 318 megawatts of capacity near Denver, with Mountain Peak Power operating at 162 MW since September 2025 and Canyon Peak Power expected to begin commercial operation in the third quarter of 2026 at 156 MW.

The transaction includes assuming US$750 million in senior secured project debt and US$250 million in equity financing through the share offering. TransAlta will issue 18.2 million common shares at $19.20 per share, with underwriters having a 15% over-allotment option for an additional 2.73 million shares.

Both facilities operate under long-term tolling agreements with investment-grade customers. Mountain Peak Power has a 30-year contract with United Power Inc., rated A, while Canyon Peak Power has a 25-year agreement with CORE Electric Cooperative, rated AA-. The contracts provide full pass-through of fuel, operations and maintenance, and capital costs.

TransAlta expects the assets to generate approximately US$80 million in annual adjusted EBITDA and US$33 million in annual free cash flow. The company projects the acquisition will be immediately accretive to free cash flow per share.

The acquisition requires Canyon Peak Power to achieve commercial operation and customary regulatory approvals. TransAlta expects to close the transaction in the fourth quarter of 2026. The equity offering is scheduled to close June 9, 2026, and is not conditional on completing the acquisition.

CIBC Capital Markets and RBC Capital Markets are leading the equity offering syndicate.