NRG Yield Inc, an NRG Energy Inc unit, has entered into a deal to purchase the assets of private firm Energy Systems Company. The transaction is valued at USD120 million in cash, a report on NASDAQ said. The acquisition deal will allow NRG Yield to boost its thermal infrastructure platform and establish itself in a new market. Moreover, the deal shows the company's expansion capability via third-party acquisitions, the report explained.
The NRG unit is planning to use its cash on hand to fund the transaction. The firm ended the third quarter with USD272 million in cash balance. The acquisition will grant NRG Yield access to the existing long-term contracts of Energy Systems. These contracts have a remaining life of almost 11 years. This will secure a steady earning for NRG Yield for the next few years, the report said.
The deal is expected to be finalized by the end of 2014. NRG Yield expects the acquired assets to be immediately accretive. In addition, the company expects its available cash to increase by USD8 million next year, NASDAQ reported.
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