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Kinder Morgan Inc and Brookfield Infrastructure Partners to sell 25% stake for $830 million in Natural Gas Pipeline Co.

By Pavankumar on Feb 23, 2021 | 03:33 AM IST


On Monday, Pipeline operator Kinder Morgan Inc[KMI] and Brookfield Infrastructure Partners announced their decision to sell a 25% stake in Natural Gas Pipeline Co. The companies would be selling their stake to a fund controlled by ArcLight Capital Partners. This transaction is worth around $830 million. The companies said that the minority interest represents an enterprise value of about $5.2 billion for NGPL. This is about 11.2 times NGPL’s 2020 earnings before interest, taxes, depreciation, and amortization.

NGPL is one of the largest interstate pipeline systems in the U.S. Both Kinder Morgan and Brookfield Infrastructure said they would each hold 37.5% interest in NGPL after the closing of the deal. The deal is expected to close in the first quarter of 2021. Kinder Morgan said it would continue to operate the pipeline after the sale of 25% of its stake. The companies said the proceeds from the deal of $830 million would be split evenly among the companies.

Brookfield said the sale of a 25% stake of NGPL was part of its infrastructure’s ongoing capital recycling program. The company also announced its decision to sell its stake in district energy operator Enwave for an amount of $4.1 billion. Whereas Kinder Morgan said it was selling the stake to shore up its financial profile. The sale of a 25% stake is believed to boost the financial flexibility of both companies, increasing their ability to achieve their strategies. 

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