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HOUSTON - Kinder Morgan , Inc. (NYSE: NYSE:KMI), a $62.5 billion market cap energy infrastructure giant trading near its 52-week high, has announced that its subsidiary, Hiland Partners Holdings LLC, will acquire a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC for $640 million. According to InvestingPro data, the company has maintained consistent dividend payments for 14 consecutive years, currently offering a 4.08% yield. The purchase, which is expected to close in the first quarter of 2025, includes a 270 MMcf/d processing facility and a 104-mile pipeline in the Williston Basin, underpinned by long-term customer contracts.
The acquisition is anticipated to be immediately beneficial to Kinder Morgan's shareholders, with a projected Adjusted EBITDA multiple of around 8 times for 2025, notably lower than the company's current EV/EBITDA of 13.4x. While trading above its Fair Value according to InvestingPro's analysis, the deal is expected to reduce future capital expenditure for the company by accommodating the growth of existing customers in the Bakken region.
KMI Natural Gas Midstream President Tom Dender highlighted the strategic nature of the acquisition, stating it would integrate well with existing Hiland gas assets and support the growing needs of customers by providing additional transportation and processing services.
The transaction is subject to Hart-Scott-Rodino clearance. Kinder Morgan plans to fund the acquisition through short-term borrowings and available cash. For deeper insights into KMI's financial health and detailed valuation metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.
Kinder Morgan is a significant player in North American energy infrastructure, operating approximately 79,000 miles of pipelines and 139 terminals. The company is focused on delivering energy in a safe, efficient, and environmentally responsible manner. The company's strong market position is reflected in its impressive 65.9% return over the past year, with a stable beta of 0.94 indicating lower volatility compared to the broader market.
This expansion comes as part of the company's broader strategy to adapt to the evolving energy landscape, providing critical infrastructure for transporting and storing natural gas and other energy products. The information is based on a press release statement from Kinder Morgan.
In other recent news, Kinder Morgan's subsidiary, Tennessee Gas Pipeline, has confirmed its decision to proceed with the $1.4 billion Mississippi Crossing Project. This development follows the company securing long-term, binding transportation agreements with customers for the project's full capacity. In parallel, Kinder Morgan has been the recipient of several target price upgrades from various analyst firms, including Citi, RBC Capital Markets, and Goldman Sachs, all citing the company's potential for major expansion projects and growth in natural gas demand.
In another development, Phillips 66 (NYSE:PSX) has reached an agreement to sell its 25% non-operated equity interest in the Gulf Coast Express Pipeline to an affiliate of ArcLight Capital Partners (WA:CPAP), LLC. The transaction, valued at $865 million, is expected to close in January 2025. This sale is part of Phillips 66's strategic plan to optimize its portfolio and rationalize non-core assets.
These are among the latest developments for both Kinder Morgan and Phillips 66. It's important to note that these recent events do not indicate future performance and are subject to market conditions and risks.
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