EnLink Midstream announces control change to ONEOK

In a significant shift in the energy sector, EnLink Midstream, LLC (NYSE:ENLC) has entered into an agreement that will result in a change of control of the company. On August 28, 2024, Global Infrastructure Partners' affiliates GIP III Stetson I, L.P., and GIP III Stetson II, L.P., collectively known as the Sellers, signed a Purchase Agreement with ONEOK (NYSE:OKE), Inc., marking a pivotal transaction.

Under the terms of the agreement, ONEOK will acquire all equity interests held by the Sellers in both EnLink Midstream, LLC and EnLink Midstream Manager, LLC, the managing member of ENLC. This deal not only includes ENLC but also encompasses its subsidiaries, effectively placing ONEOK in a controlling position upon completion of the transaction.

The parties involved anticipate that the closing of this transaction will occur in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions. The successful conclusion of this deal will see ONEOK take over the management and control of ENLC and its subsidiaries.

EnLink Midstream, headquartered in Dallas, Texas, operates within the natural gas transmission sector under the Industrial Classification Code 4922. The company, formerly known as New Public Rangers, L.L.C., changed its name following its incorporation in Delaware. EnLink Midstream is recognized for its extensive network of midstream energy services.

The information for this article is based on a press release statement.

In other recent news, ONEOK, Inc. has announced a significant acquisition, sealing a $5.9 billion deal for Medallion Gathering & Processing, LLC and Global Infrastructure Partners' entire stake in EnLink Midstream, LLC. This move aligns with ONEOK's strategic growth objectives and expands its footprint in the midstream sector, crucial for the processing, storage, and transportation of oil and gas.

Simultaneously, EnLink Midstream, LLC has finalized an agreement for a public offering of $500 million in senior notes, guaranteed by its subsidiary, EnLink Midstream Partners, LP. The proceeds from this offering are intended for general corporate purposes, including debt repayment.

EnLink Midstream also reported a robust second quarter in 2024, with $306 million in adjusted EBITDA, and has repurchased $50 million of its units. The company has launched a third processing plant in the Permian and expanded its natural gas storage assets in Louisiana.

Analysts note the company's resilience, with a strong hedge in place for the commodity portion of the business. EnLink Midstream anticipates a stronger performance in the second half of 2024, particularly in the fourth quarter, due to the expected seasonal strength of its Louisiana NGL business.

InvestingPro Insights

In light of EnLink Midstream's (NYSE:ENLC) recent strategic moves and the pending acquisition by ONEOK, Inc., investors are keenly analyzing the company's financial health and stock performance. According to InvestingPro data, EnLink Midstream has a market capitalization of approximately $6.57 billion, indicating its significant presence in the midstream energy sector. Despite facing a revenue decline of 14.01% over the last twelve months as of Q2 2024, the company has shown resilience with a gross profit margin of 30.08% during the same period, underscoring its ability to maintain profitability amid challenging market conditions.

From a valuation standpoint, EnLink Midstream's P/E ratio stands at 44.81, which is on the higher side, suggesting that the stock is trading at a premium compared to earnings. However, this is somewhat mitigated by the company's PEG ratio of -0.7, indicating that the high P/E may be offset by negative earnings growth expectations. Additionally, EnLink's stock is trading near its 52-week high, at 96.62% of the peak, reflecting investor confidence in the company's prospects and strategic initiatives.

InvestingPro Tips highlight that EnLink Midstream has maintained its dividend payments for 11 consecutive years, which could be a key consideration for income-focused investors, especially with a current dividend yield of 4.03%. Moreover, the company's stock has provided a strong return over the last five years, reinforcing its long-term investment appeal.

For those seeking more in-depth analysis, InvestingPro offers additional tips on EnLink Midstream, which can be found at https://www.investing.com/pro/ENLC. These insights can provide investors with a more comprehensive understanding of the company's financial position and stock performance as they assess the impact of the upcoming acquisition by ONEOK, Inc.

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