Brookfield Infrastructure Partners LP has agreed to acquire Colonial Enterprises, the owner of the Colonial Pipeline, in a deal valued at $9 billion. (Source: Shutterstock.com)
Brookfield Infrastructure Partners LP (BIP) has agreed to acquire Colonial Enterprises, the owner of the Colonial Pipeline, for an enterprise value of $9 billion, the companies announced April 4.
Colonial Enterprises fully owns Colonial Pipeline Co., a non-operated venture, and Colonial Marketing Co.
The Colonial Pipeline is the largest refined oil pipeline in the U.S. and stretches approximately 5,500 miles transporting oil products from the Gulf Coast in Texas to the U.S. Atlantic Seaboard in New York. Analysts at Jefferies, which acted as an adviser on deal, said BIP and its institutional partners pay the equivalent of 9x EBITDA for Colonial.
The co-owners of Colonial Enterprises agreed to sell 100% of their shares in the company to Brookfield subsidiary Colossus AcquireCo LLC. The owners are Shell Midstream Operating LLC (16.125%); Koch Capital Investments Co. LLC (28.088%); KKR-Keats Pipeline Investors LP (23.443%); Caisse de dépôt et placement du Québec (16.549%); and IFM Investors (15.795%).
Shell Midstream, a subsidiary of Shell Plc, said the sale values its share of Colonial at $1.45 billion, inclusive of approximately $500 million in non-recourse debt and excluding customary closing adjustments, according to an April 4 press release.
The divestment reflects Shell’s focus on performance, discipline and simplification, said Andrew Smith, president of the Shell Trading & Supply. "It will allow us to concentrate on areas where we have scale and competitive advantage," Smith said.
BIP said its equity investment at closing is expected to be $500 million, approximately 15% of the total equity investment and funded by proceeds from the company’s capital recycling initiatives.
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Debt financing for the transaction was led by Morgan Stanley Senior Funding Inc. and Mizuho Bank Ltd. Morgan Stanley Senior Funding Inc. acted as sole bookrunner on the term loan facility.
Jeffries LLC, Greenhill & Co. LLC, a Mizuho affiliate, and Morgan Stanley & Co. LLC acted as joint financial advisers to BIP on the transaction.
The transaction is subject to customary closing conditions and regulatory approvals. It is expected to close in fourth-quarter of 2025.
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