KMP to Purchase El Paso - Biggest energy deal of 2011?
Not a major surprise as the pipeline industry had to start consolidating with the huge growth in production of NGLs, Oils and new shale plays. Margins are very low and valuations are fair.
Seems they will sell off the production and exploration assets and focus on merging the pipeline and terminal assets.
http://dealbook.nytimes.com/2011/10/16/kinder-mor…
http://www.marketwatch.com/story/kinder-morgan-to…
Another huge win for Evercore for sure, same with Barclays and Morgan Stanley.
Between this and the BHP / HK deal it has been a huge year for M&A within the energy sector...
You see Morgan and Evercore on deal after deal after large M&A deal this year ... god.
Evercore has come on strong on the energy space lately, but have done so via fees that are dramatically lower (like 90% less) than those a BB would charge for advisory work on a deal of that size. Not saying it's a bad strategy but certainly helps when they're trying to penetrate a new industry.
No surprise that Barcap is involved.
KMI had to do this to fix their business model; rumors over the past few months was WMB was the target. Other diversified c-corps with pipelines and especially GP interests could be future M&A targets.
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