DT Midstream Announces $1.2 Billion Acquisition of Strategic Midwest FERC-Regulated Natural Gas Pipelines

Core Viewpoint - DT Midstream, Inc. has announced an agreement to acquire three FERC-regulated natural gas transmission pipelines from ONEOK, Inc. for $1.2 billion, enhancing its portfolio in the Midwest market with a total capacity exceeding 3.7 Bcf/d [1][5] Transaction Details - The acquisition includes 100% operating ownership of Guardian Pipeline, Midwestern Gas Transmission, and Viking Gas Transmission [2][3] - The transaction consideration is $1.2 billion in cash, with a transaction multiple of approximately 10.5x 2025 Adjusted EBITDA [5] - Financing for the transaction will consist of approximately $900 million in debt and $300 million in common equity [5] Strategic Rationale - The acquisition aligns with DT Midstream's strategy of owning natural gas assets that connect supply basins with demand centers, supported by take-or-pay contracts with creditworthy customers [6] - The pipeline segment is expected to contribute approximately 70% of Adjusted EBITDA in 2025, increasing the backlog of organic growth projects [6] - The acquired portfolio has a demand-pull customer base of about 90%, with approximately 85% of revenues coming from investment-grade customers [6] Closing Details - The transaction has been approved by DT Midstream's Board of Directors and is anticipated to close in late 2024 or early 2025, pending regulatory approvals [7] Company Overview - DT Midstream is involved in the ownership, operation, and development of natural gas pipelines and related facilities, focusing on transporting clean natural gas across the U.S. and Canada [11]