Kinder Morgan to invest up to $150 million in Watco Companies
Written by jrood
Watco Companies, Inc., and Kinder Morgan Energy Partners, L.P., reached an agreement whereby Kinder Morgan will invest up to $150 million over the next year in Watco Companies in exchange for a preferred equity position in the company. Kinder Morgan's initial investment will be $50 million upon closing, which is scheduled to occur in January of 2011.
Kinder Morgan is a leading
pipeline transportation and energy storage company in North America. The
transaction provides capital to Watco for further expansion of specific
projects and offers Kinder Morgan the opportunity to share in the subsequent
growth.
"This investment
complements Kinder Morgan’s existing terminal network, and provides our
customers more transportation services for many commodities that we handle,"
said, Jeff Armstrong, president of Kinder Morgan’s terminals business. "We
also believe that the relationship with Watco will produce additional growth
opportunities through new projects such as crude unit train operations and
incremental business at our terminal storage facilities."
The transaction is expected
to be immediately accretive to cash distributable to KMP unit holders.
Rick Webb, Chairman and CEO of Watco
said, "We look forward to partnering with our good customer, Kinder Morgan. We
are honored to have them as our partner and believe their reputation for
providing safe, quality, value-creating terminal and storage services when
combined with our rail service offerings will create many beneficial
opportunities for both of our companies."
