KMP is purchasing the assets at about eight times 2012 EBITDA and expects that the purchase price will be an even lower multiple of 2013 EBITDA, given the full-year benefit of cost savings and expansion projects. KMP plans to fund 10 percent of the transaction value, net of debt assumed, with KMP units that will be issued to KMI at closing valued at approximately $387 million. The remaining value is expected to be funded with borrowings under a new $2.0 billion credit facility, and equity and debt issuances. Any issuances of equity or debt post closing of this transaction, as well as proceeds from the assets to be divested that were noted above, will be used to repay the credit facility. KMI intends to use the proceeds from the drop-down sales to reduce debt.TGP is a 13,900-mile pipeline system with a design capacity of about 7.5 billion cubic feet (Bcf) per day. It transports natural gas from Louisiana, the Gulf of Mexico and south Texas to the northeastern United States, including the metropolitan areas of New York City and Boston. EPNG is a 10,200-mile pipeline system with a design capacity of about 5.6 Bcf per day. It transports natural gas from the San Juan, Permian and Anadarko basins to California, other western states, Texas and northern Mexico. Combined, TGP and EPNG have more than 200 Bcf of working natural gas storage capacity.
KMP To Purchase 100% Of Tennessee Gas Pipeline And 50% Of El Paso Natural Gas Pipeline For Approximately $6.22 Billion
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.