DT Midstream Advances Expansion with $1.2 Billion Pipeline Acquisition

Deal News | Nov 20, 2024 | Globenewswire

DT Midstream Advances Expansion with $1.2 Billion Pipeline Acquisition

DT Midstream, Inc., a prominent natural gas company, has announced its $1.2 billion acquisition of three natural gas transmission pipelines from ONEOK, Inc. The pipelines, which stretch over 1,300 miles and have a capacity of over 3.7 billion cubic feet per day, are strategically located in the Upper Midwest, a region poised for continued power demand growth. This acquisition aligns with DT Midstream's strategy to enhance its portfolio by owning and operating natural gas assets connected to key demand centers and premier supply basins. The acquisition price suggests a 10.5x EBITDA multiple for 2025, and the transaction is expected to increase the company's pipeline segment's contribution to approximately 70% of Adjusted EBITDA by 2025. Financially advised by Barclays and legally counseled by Weil, Gotshal & Manges LLP, DT Midstream plans to fund the acquisition with $900 million in debt and $300 million in common equity. This strategic purchase is expected to be accretive to Distributable Cash Flow and improve the company's overall business profile.

Sectors

  • Energy
  • Mergers & Acquisitions

Geography

  • United States – DT Midstream, an American company, is acquiring pipelines that operate in multiple states across the Midwest, a notable region for natural gas demand.

Industry

  • Energy – The article revolves around the acquisition of natural gas pipelines, a crucial segment within the energy industry focusing on the distribution and transportation of natural gas.
  • Mergers & Acquisitions – The primary focus of the article is a significant acquisition deal in the pipeline sector, highlighting key details about the transaction.

Financials

  • $1.2 billion – The total consideration for the acquisition of the natural gas pipelines.
  • ~10.5x – The acquisition multiple based on 2025 expected Adjusted EBITDA.
  • 3.7 Bcf/d – The total capacity of the acquired pipelines.
  • 1,300 miles – The combined length of the three acquired pipelines across seven states.
  • $900 million – The portion of the acquisition financed through debt.
  • $300 million – The portion of the acquisition financed through common equity.

Participants

NameRoleTypeDescription
DT Midstream, Inc.Bidding CompanyCompanyDT Midstream is a major owner and operator of natural gas infrastructure in the U.S., looking to expand their pipeline operations in the Midwest.
ONEOK, Inc.Selling CompanyCompanyONEOK, Inc. is an energy company in the U.S. selling a portfolio of natural gas pipelines to DT Midstream.
BarclaysFinancial AdvisorCompanyBarclays is providing financial advisory and committed financing for the acquisition in support of DT Midstream.
Weil, Gotshal & Manges LLPLegal AdvisorCompanyWeil, Gotshal & Manges LLP is serving as legal counsel to DT Midstream for this transaction.