El Paso Pipeline To Buy Natural Gas Assets From Kinder Morgan For About $2 Bln

(RTTNews) - El Paso Pipeline Partners, L.P. (EPB) said Monday that it will acquire Kinder Morgan, Inc.'s (KMI) its 50% interest in Ruby Pipeline, 50% interest in Gulf LNG and 47.5% interest in Young Gas Storage.

The deal value is about $2 billion, including $1.012 billion of proportionate debt at Ruby and Gulf LNG, resulting in an equity purchase price of $972 million.

The purchase, which is expected to close in May and be effective April 30, was approved by the independent members of the board of directors of Kinder Morgan, and by the conflicts committee and the board of directors of El Paso's general partner following the receipt of separate fairness opinions from different investment banks.

Upon closing, the deal will be immediately accretive to El Paso Pipeline Partners, which is purchasing the assets at about nine times 2013 EBITDA.

El Paso Pipeline Partners plans to fund 10% of the deal value, net of the proportionate debt, with El Paso Pipeline Partners common units that will be issued to Kinder Morgan at closing valued at about $97.2 million. The remaining value is expected to be funded with the proceeds of one or more equity or debt issuances and/or borrowings under El Paso's revolving credit facility.

Kinder Morgan plans to use the proceeds from the dropdown sales to reduce debt.