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Technology Stocks : KMI- a fallen high dividend yielder - for how long?
KMI 26.19+0.4%3:59 PM EDT
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To: miraje who wrote (307)1/13/2025 11:29:46 AM
From: robert b furman3 Recommendations

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Fairly large acquisition to be accretive immediately:

Kinder Morgan Announces Acquisition of Gas Gathering & Processing System in Bakken from Outrigger Energy II
January 13, 2025

$640 million purchase includes 270 MMcf/d processing plant and rich gas header system strategically located in Williston Basin, North Dakota

HOUSTON--(BUSINESS WIRE)-- Kinder Morgan, Inc. (NYSE: KMI) today announced that its subsidiary, Hiland Partners Holdings LLC, has agreed to purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC for $640 million. The acquisition includes a 270 million cubic feet per day (MMcf/d) processing facility and a 104-mile, large-diameter, high-pressure rich gas gathering header pipeline with 350 MMcf/d of capacity connecting supplies from the Williston Basin area to high-demand markets. The gathering and processing system is backed by long-term contracts with commitments from major customers in the basin.

“We’re pleased to be integrating this complementary system with our existing Hiland gas assets to aggregate additional supplies from the Bakken,” said KMI Natural Gas Midstream President Tom Dender. “This strategic acquisition allows us to efficiently expand our footprint and provide incremental transportation and processing services to meet the growing needs of our customers.”

KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 million of expected cash payments in 2025 that receive deferred revenue recognition. With this transaction, KMI expects to reduce future capital expenditures needed to accommodate the growth of its existing Bakken customers. Initially, KMI plans to fund the transaction with short-term borrowings and cash on hand.

The transaction requires clearance under Hart-Scott-Rodino and is expected to close in the first quarter of 2025.
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