Kinder Morgan to Buy Copano Energy for $3.2 Billion

From New York Times

By Mark Scott

Kinder Morgan Energy Partners has agreed to buy the natural gas services company Copano Energy in an all-stock deal worth $3.2 billion.

Under the terms of the deal announced late on Tuesday, Kinder Morgan will pay 0.4563 of its own shares for each share in Copano. The acquisition values Copano at $40.91 a share, about 24 percent above the company’s closing share price on Tuesday.

Including debt, the deal is worth around $5 billion.

The deal for Copano, which is based in Houston, is the latest in the American oil and gas sector, which has seen an influx of investment to take advantage of so-called unconventional energy resources like shale gas.

These energy deposits have been found from Wyoming to New York, and are extracted by a controversial drilling technology called hydraulic fracturing, or fracking, which uses a high-pressure mixture of water, sand and chemicals to crack shale formations to release oil and gas reserves.

“We continue to be bullish on the domestic shale plays and believe they will drive substantial future growth,” Kinder Morgan’s chief executive, Richard D. Kinder, said in a statement.

Kinder Morgan has been actively buying assets to benefit from the American energy boom. In 2011, the company agreed to buy the El Paso Corporation for $21.1 billion, though Kinder Morgan has been required to make a number of disposals to appease antitrust regulators.

Copano operates almost 7,000 miles of natural gas pipelines in Texas, Oklahoma and Wyoming. The private equity firm TPG Capital, which is Copano’s largest shareholder, is supporting the deal, according to a statement from Kinder Morgan.

The deal for Copano is expected to close in the third quarter of this year.

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