Kinder Morgan, Inc. to Sell Terasen Water & Utility Services
Kinder Morgan, Inc. to Sell Terasen Water and Utility Services
News Release, Kinder Morgan, 17-Jan-2006
Terasen spins off pair of companies
Scott Simpson, Vancouver Sun, 18-Jan-2006
Kinder Morgan, Inc. to Sell Terasen Water and Utility Services
HOUSTON, Jan. 17 /PRNewswire-FirstCall/ -- Kinder Morgan, Inc. (NYSE: KMI) today announced that its wholly owned subsidiary, Terasen Inc., has entered into a definitive agreement to sell Terasen Water and Utility Services and its affiliated companies to a consortium for approximately C$125 million (subject to certain purchase price adjustments at closing). Terasen Water and Utility Services provides water, wastewater and utility services primarily in western Canada. The group purchasing the business is being led by CAI Capital Management Co. and includes the existing management team of Terasen Water and Utility Services. The transaction is expected to close by the end of April 2006.
"When we acquired Terasen, we noted that the water and utility services business was outside of our core asset base of pipelines and terminals," said Richard D. Kinder, chairman and CEO of KMI. "After conducting a thorough review of these assets, we believe this sale will be in the best long-term interest of KMI and Terasen Water and Utility Services." Kinder noted that proceeds from the sale will be used to pay down debt. The sale does not include CustomerWorks LP, a joint venture owned 30 percent by KMI and 70 percent by Enbridge Inc.
Kinder Morgan, Inc. is a leading North American energy transportation, storage and distribution company with approximately 40,000 miles of natural gas and products pipelines, 1.1 million natural gas distribution customers and 150 terminals. Kinder Morgan, Inc. owns the general partner interest of Kinder Morgan Energy Partners, L.P. (NYSE: KMP), one of the largest publicly traded pipeline limited partnerships in the United States. Combined, the two companies have an enterprise value of over $35 billion.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission.
SOURCE Kinder Morgan, Inc.
CONTACT: Larry Pierce, Media Relations, +1-713-369-9407, or Mindy Mills,
Investor Relations, +1-713-369-9490, both of Kinder Morgan, Inc.
Web site: http://www.kindermorgan.com (KMI KMP)
CAI Capital Management Co.
http://www.caifunds.com
Terasen spins off pair of companies
Water, utility service groups sold for $125 million
Scott Simpson
Vancouver Sun
January 18, 2006
Terasen's water and utility service companies changed hands Tuesday for the second time in three months, with company owner Kinder Morgan Inc. of Houston, Texas, announcing it's selling the subsidiaries for $125 million.
The principal buyers are a Canadian-focused investment company, CAI Capital Management, and a consortium including the existing Terasen Water and Utilities executive team.
Terasen Water and Utilities president Brett Hodson, who will lead the new company, said the deal represents an "exciting" opportunity that will maintain the company's momentum.
"It's an opportunity to keep doing what we've been working on for a number of years now. It's probably the best outcome overall, not just for ourselves, but for our employees and our customers because it allows us to keep the entity intact and move forward as one full team," Hodson said.
"Under Kinder Morgan it was a little uncertain where this group fit."
Kinder Morgan announced Aug. 1 that it was paying $6.9 billion US for a friendly takeover of Vancouver-based Terasen Inc., with final regulatory approvals received Nov. 30 despite broad public opposition to the purchase of British Columbia's primary home heating utility to a U.S. company.
Both the B.C. Utilities Commission and Investment Canada said the deal conformed to their requirements for a foreign takeover -- including a willingness to invest money to maintain and expand the scope of operations.
The company manufactures water treatment systems for hundreds of small to medium sized North American communities including resorts and first nations, installs automated water metering systems, and also builds water and sewage systems.
In a few instances it has established public-private partnerships with local governments to operate the systems on an ongoing basis, but does not actually own the water its moving.
"We tend to just operate on contract to the municipalities or the communities," Hodson said. "There are opportunities for us to invest in some of these systems and if it makes sense we would actually own the infrastructure system but let's make it clear. We're not owning the actual water in British Columbia.
"It has everything to do with the pipes, the valves, the fittings, and making sure the infrastructure is in place."
In Greater Vancouver, Terasen manages the city of Surrey's residential water metering program, and it built the Lower Lonsdale district heating system in the city of North Vancouver.
Surrey general manager of engineering Paul Ham said the city does not expect any change in its business relationship with Terasen as a result of the sale.
The water and utility services section of Terasen was never considered germane to the deal -- Kinder Morgan is fundamentally an oil and gas pipeline company, and even the B.C. natural gas utility it retains is a new venture.
"When we acquired Terasen, we noted that the water and utility services business was outside of our core asset base of pipelines and terminals," Kinder Morgan chairman and chief executive officer Rich Kinder said in a news release.
Kinder said proceeds from the sale will be used to pay down debt.
A spokesperson said for CAI said the company principal best qualified to discuss the deal was in transit and unavailable for comment.
CAI has offices in New York, Vancouver, Toronto and Montreal.
© The Vancouver Sun 2006
CAI Capital Management Co.
http://www.caifunds.com