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Kinder Morgan buys TPG-backed Copano Energy in $5bn deal

30 Jan 2013

copano_sqNew York-listed pipeline giant Kinder Morgan Energy Partners has bought Copano Energy, the midstream natural gas company backed by private equity firm TPG Capital, for about $5bn including debt.

TPG Capital, Copano’s largest shareholder with an equity stake of more than 14 per cent, will reap a 41 per cent premium on its $300m investment in the business in 2010 once the deal goes through.

The deal will be a 100 per cent unit for unit transaction with an exchange ratio of .4563 KMP units per Copano unit, the companies said in a joint statement.

Kinder Morgan said it will pay $40.91 per Copano common unit, representing a 23.5 per cent premium to Copano’s closing price on January 29 2013.

Copano operates primarily in Texas, Oklahoma and Wyoming, and provides services to natural gas producers, including natural gas gathering, processing, treating and natural gas liquids fractionation.

The company owns an interest in or operates about 6,900 miles of pipelines with 2.7 billion cubic feet per day of natural gas throughput capacity and nine processing plants with more than 1 Bcf/d of processing capacity and 315 million cubic feet per day of treating capacity.

Copano is headquartered in Houston, Texas, and also has a large office in Tulsa, Oklahoma. The company currently employs 415 staff, the majority of which Kinder Morgan intends to retain.

Citi acted as financial advisor for Kinder Morgan, while Weil Gotshal & Manges and Bracewell & Giuliani acted as its legal counsel.

Barclays Capital and Jefferies provided financial advisory services to Copano, while Wachtell, Lipton, Rosen & Katz acted as the company’s legal counsel.

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