Vistra: Merger With Dynegy Creates "Tremendous" Platform For Retail Growth

Discussing the merger between Vistra Energy, the parent company for TXU Energy and Luminant, and Dynegy Inc., first announced yesterday (see details here), Vistra Energy President and Chief Executive Officer Curt Morgan said during an analyst call that retail would be a "focus" for the deployment of capital at the combined firm, touting the "tremendous" platform for retail growth the merger creates

Asked about capital allocation, Morgan said, "In the first instance, we do believe that getting back to our 3-times gross debt to EBITDA is a primary initiative. But I would also say that you always have to be opportunistic in this business."

Morgan said that generation acquisitions would not be a primary focus of capital deployment, given the combined firms' large positions particularly in ERCOT and ISO-NE.

"I think really what we would like to do, we think we just have this tremendous platform to grow our retail business, and we got a lot of length to do it and construct the products that you need to be able to serve retail customers in other markets, we have a capability to do it. We will expand what we do through our customer base, products and services, so I think that will be a focus," Morgan said

"I'll also tell you that, right now, we feel like the multiples on some of the retail outside of ERCOT, because the margins are less, are probably a little frothier than we'd like, so we'll be disciplined. But I wouldn't be surprised if we would deploy capital in that direction [retail M&A] if we saw something that made a lot of sense," Morgan said