Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Kinder Morgan Energy Partners to Swallow Copano

By Rich Duprey - May 1, 2013 at 1:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shareholders approve deal for midstream natural gas company that, including debt, totals about $5 billion.

Unconventional shale plays in the U.S. continue to drive the boom in American energy, and shareholders of midstream natural gas provider Copano ( CPNO ) took a step this week to ensure they'll be a part of the industry's continued growth by approving the company's merger with Kinder Morgan Energy Partners (NYSE: KMP). The merger was announced back in January and more than 99% of the units voted approved it Tuesday.

The all-stock deal values Copano at $3.2 billion, but including company debt the total transaction is worth some $5 billion. Kinder Morgan will acquire all of Copano's outstanding units in a 100% unit-for-unit transaction with an exchange ratio of 0.4563 Kinder Morgan units for each Copano unit. 

Copano operates approximately 7,000 miles of natural gas pipelines in Texas, Oklahoma, and Wyoming with capacity of 2.7 billion cubic feet per day of gas and nine processing plants with more than 1 bcf/d capacity. 

Its largest shareholder with a 14% stake, TPG Capital, signed off on the deal, no doubt enjoying the 41% premium it will receive for the $300 million it invested in the midstream player in 2010.

Kinder Morgan Energy said in January that it expects to retain the "vast majority" of the 415 people employed by Copano. The transaction is expected to be modestly accretive to KMP in 2013 and about $0.10-per-unit accretive for at least the next five years beginning in 2014.


This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Copano Energy, L.L.C. Stock Quote
Copano Energy, L.L.C.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.