46 min
A Remarkable Corporate Turnaround: The “Take-Private” of Talen Energy with CEO Ralph Alexander and CFO Alex Hernandez Leadership Lyceum: A CEO's Virtual Mentor
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- Business
A Remarkable Corporate Turnaround:
The “Take-Private” of Talen Energy with CEO Ralph Alexander and CFO Alex Hernandez
A CEO’s Virtual Mentor® Episode 22
Welcome to Episode 22 and May 2019, which marks Lyceum’s three-year anniversary of publishing A CEO's Virtual Mentor®.
Today I'm joined by Talen Energy’s CEO, Ralph Alexander, and CFO, Alex Hernandez. We'll be discussing the remarkable turnaround of Talen Energy that Ralph and Alex have been leading.
Talen Energy in its privately-held form today is unique and its evolution to its current state illustrates the range of leadership approaches available for a company in a “take-private” setting. There's a definite before, middle, and beyond to the take private transformation. Talen is still in the early stage of the “beyond” era. The red-letter date of the take-private was December 6th, 2016. And to set context, we have to back up a little bit. About a year and a half before the take-private, Talen Energy was formed when Pennsylvania Power & Light, or PPL, spun off their power generation assets and combined them with those belonging to private equity group Riverstone. The company was listed on the New York Stock Exchange on June 1st, 2015, with initial ownership being 65% PPL and 35% Riverstone.
That company, which Ralph and Alex refer to as “Talen 1.0,” had about 15,000 megawatts of capacity split across fuel sources, with about 43% from natural gas, 40% from coal, and 15% from nuclear (from the company’s one nuclear facility, Susquehanna). Those assets sold into two major wholesale markets in ERCOT and PJM, plus a small amount in New England. Talen generated a proforma of $4.3 billion in 2014 revenues.
On December 6th, 2016, Riverstone purchased the remaining 65% of Talen, making Talen a privately-held company, and appointed Ralph and Alex to lead the company. They faced the massive task of sorting out what the company had and planning what they would do with it.
Our interview covers a lot of ground and addresses an array of business leadership questions, including:
What are the expectations and requirements that a private equity owner has for a company and a management team? What historical decisions prior to new ownership of a company led to lackluster performance? What were the strategic views embedded in the private equity investor’s thesis about a company? Why invest more deeply in a company that is suffering from lackluster performance? Can new management and their decisions have a marked impact? How does a new leader ferry the costs out of and efficiencies into a business after acquisition? Does private ownership provide benefits for a company? What does a productive, strategic partnership between a CEO and a CFO look like? What is the role of a “strategic” CFO? Is good leadership universal? Is a management team and its profitable approach transportable to other sectors? We would like to express our special thanks to the clients of Lyceum Leadership Consulting that enable us to bring you this podcast.
Thanks for listening. We can’t improve without your feedback – write us through our website www.LeadershipLyceum.com and subscribe wherever you listen to your podcasts.
Informative and Helpful Links
Talen Energy's Website - https://www.talenenergy.com/
Riverstone's Website - https://www.riverstonellc.com/
Economic dispatch of power generation resources explained by the EIA - https://www.eia.gov/todayinenergy/detail.php?id=7590
Program Guide Episode 22
A Remarkable Corporate Turnaround:
The “Take-Private” of Talen Energy with CEO Ralph Alexander and CFO Alex Hernandez
0:00 Introduction to Talen Energy and CEO Ralph Alexander and CFO Alex Hernandez
4:00 Expectations and requirements that Riverstone had for the company and the management team.
7:11 Historical decisions prior to new ownership of the company that led to lackluster performance.
9:17 Break
A Remarkable Corporate Turnaround:
The “Take-Private” of Talen Energy with CEO Ralph Alexander and CFO Alex Hernandez
A CEO’s Virtual Mentor® Episode 22
Welcome to Episode 22 and May 2019, which marks Lyceum’s three-year anniversary of publishing A CEO's Virtual Mentor®.
Today I'm joined by Talen Energy’s CEO, Ralph Alexander, and CFO, Alex Hernandez. We'll be discussing the remarkable turnaround of Talen Energy that Ralph and Alex have been leading.
Talen Energy in its privately-held form today is unique and its evolution to its current state illustrates the range of leadership approaches available for a company in a “take-private” setting. There's a definite before, middle, and beyond to the take private transformation. Talen is still in the early stage of the “beyond” era. The red-letter date of the take-private was December 6th, 2016. And to set context, we have to back up a little bit. About a year and a half before the take-private, Talen Energy was formed when Pennsylvania Power & Light, or PPL, spun off their power generation assets and combined them with those belonging to private equity group Riverstone. The company was listed on the New York Stock Exchange on June 1st, 2015, with initial ownership being 65% PPL and 35% Riverstone.
That company, which Ralph and Alex refer to as “Talen 1.0,” had about 15,000 megawatts of capacity split across fuel sources, with about 43% from natural gas, 40% from coal, and 15% from nuclear (from the company’s one nuclear facility, Susquehanna). Those assets sold into two major wholesale markets in ERCOT and PJM, plus a small amount in New England. Talen generated a proforma of $4.3 billion in 2014 revenues.
On December 6th, 2016, Riverstone purchased the remaining 65% of Talen, making Talen a privately-held company, and appointed Ralph and Alex to lead the company. They faced the massive task of sorting out what the company had and planning what they would do with it.
Our interview covers a lot of ground and addresses an array of business leadership questions, including:
What are the expectations and requirements that a private equity owner has for a company and a management team? What historical decisions prior to new ownership of a company led to lackluster performance? What were the strategic views embedded in the private equity investor’s thesis about a company? Why invest more deeply in a company that is suffering from lackluster performance? Can new management and their decisions have a marked impact? How does a new leader ferry the costs out of and efficiencies into a business after acquisition? Does private ownership provide benefits for a company? What does a productive, strategic partnership between a CEO and a CFO look like? What is the role of a “strategic” CFO? Is good leadership universal? Is a management team and its profitable approach transportable to other sectors? We would like to express our special thanks to the clients of Lyceum Leadership Consulting that enable us to bring you this podcast.
Thanks for listening. We can’t improve without your feedback – write us through our website www.LeadershipLyceum.com and subscribe wherever you listen to your podcasts.
Informative and Helpful Links
Talen Energy's Website - https://www.talenenergy.com/
Riverstone's Website - https://www.riverstonellc.com/
Economic dispatch of power generation resources explained by the EIA - https://www.eia.gov/todayinenergy/detail.php?id=7590
Program Guide Episode 22
A Remarkable Corporate Turnaround:
The “Take-Private” of Talen Energy with CEO Ralph Alexander and CFO Alex Hernandez
0:00 Introduction to Talen Energy and CEO Ralph Alexander and CFO Alex Hernandez
4:00 Expectations and requirements that Riverstone had for the company and the management team.
7:11 Historical decisions prior to new ownership of the company that led to lackluster performance.
9:17 Break
46 min