Hallador Energy Company (HNRG) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of 460 MW Siemens gas turbines and related equipment supports transition to a diversified, multi-fuel independent power producer and accelerates growth leveraging existing infrastructure.

• Move aligns with strategy to capitalize on surging data center demand and capacity shortages in MISO Zone 6, positioning for long-term regional growth.

• Secured long-term PPAs and capacity agreements provide stable, predictable cash flows and support future platform expansion.

• High barriers to entry due to vertical integration and 100% interconnection ownership create a durable competitive advantage.

Financial terms and conditions

• Equipment purchase price is $350 million ($760/kW), with an additional $100 million for transportation, refurbishment, insurance, and logistics.

• Payment structured as a series of installments tied to equipment milestones, not a lump sum.

• No outstanding bank debt as of March 31; $120 million credit facility available.

• Recently secured a 12-year capacity agreement valued at over $1 billion, enhancing revenue visibility.

Synergies and expected cost savings

• Equipment package represents over half of total project cost, providing visibility into capital stack.

• Acquisition price considered attractive versus market alternatives, with potential for resale at a profit if project does not proceed.

• Ownership of Sunrise Coal ensures cost control and supply security, mitigating supply volatility and market risk.