Kinder Morgan to Acquire Copano Energy (KMP, CPNO)

Kinder Morgan Energy Partners LP (NYSE: KMP) announced late on Tuesday that it will acquire Copano Energy LLC (NASDAQ: CPNO) in an all stock deal estimated at $3.2 billion, a move which would allow the energy transportation and storage company to gain traction in oil and gas abundant regions of Texas, Oklahoma and Wyoming.

Key Points

  • After including the debt the deal is valued at about $5 billion
  • Both companies’ respective boards have approved the deal, which is expected to close by the third quarter of 2013, subject to an approval from regulators and Capino’s investors

Copano Energy Partners, which specializes in processing, doing work in gatherings and gas fractionation services, mainly serves natural gas producers and owns an interest in or operates about 6,900 miles of pipelines having capacity of 2.7 billion cubic feet per day (bcf/d) and owns nine processing plants with above 1 bcf/d capacity.

According to the deal, Kinder Morgan Energy Partners will pay Copano $41.91 per common share, which represents 24% premium on Company’s closing price of $33.13. According to data provided by FactSet Research, Copano has nearly 90.9 million shares outstanding.

Kinder also said that it will employ most of Copano’s 415 or so workers.

After the deal is closed, Kinder Morgan Energy Partners LP will take total control of The Eagle Ford Gathering, which at present is a joint venture between the company and Copano Energy. The Eagle Ford Gathering provides multiple services such as gathering, processing and transportation services to natural gas producers in the Eagle Ford Shale. The Eagle Ford Gathering has approximately 400 miles of pipelines.

Commenting over the deal, Kinder Morgan Energy Chairman and CEO Richard Kinder said Tuesday, “We will be able to pursue incremental development in the Eagle Ford Shale play in south Texas, gain entry into the Barnett Shale Combo in north Texas and the Mississippi Lime and Woodford Shale in Oklahoma.”




Ed Liston is a senior contributing editor at An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.