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.
RELATED
Report: Colonial Pipeline Considering $10B Sale
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.
Recommended Reading
On The Market This Week (April 7, 2025)
2025-04-11 - Here is a roundup of marketed oil and gas leaseholds in the Permian, Uinta, Haynesville and Niobrara from select E&Ps for the week of April 7, 2025.
EOG Secures Award to Explore Abu Dhabi for Unconventional Oil
2025-05-16 - U.S. shale giant EOG Resources will evaluate 900,000 acres in a hydrocarbon-rich basin in Abu Dhabi under a new concession agreement with ADNOC.
M&A Competition Off to the Races as Mesa Minerals Kicks Off Fourth Iteration
2025-04-16 - The Mesa Minerals IV launch comes as M&A competition grapples for mineral and royalty interests, no matter the basin, says Mesa Minerals CEO Darin Zanovich.
E&P Highlights: May 19, 2025
2025-05-19 - Here’s a roundup of the latest E&P headlines, from a new oil discovery offshore Brazil to Libya’s latest upstream licensing round.
Sabine Oil & Gas to Add 4th Haynesville Rig as Gas Prices Rise
2025-03-19 - Sabine, owned by Japanese firm Osaka Oil & Gas, will add a fourth rig on its East Texas leasehold next month, President and CEO Carl Isaac said.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.