July 08, 2019 [Bloomberg] – UGI Corporation (NYSE: UGI) announced that its subsidiary, UGI Energy Services, LLC, has signed a definitive agreement to acquire the equity interests of Columbia Midstream Group LLC, (“CMG”) from a subsidiary of TC Energy Corporation (NYSE: TRP) (“TC Energy”) for approximately $1.275 billion, subject to customary adjustments at closing.
CMG holds five gathering systems, with capacity of roughly 2,675,000 MMBtu/day and 240 miles of pipeline, located in the southwestern core of the Appalachian Basin. The acquisition significantly expands UGI’s midstream portfolio and provides an opportunity to invest an additional $300 – $500 million over the next five years at attractive returns.
The company expects the transaction to be EPS neutral in fiscal year 2020, and accretive beginning in fiscal year 2021 excluding transaction and integration costs. “We are very pleased to announce this important transaction as we continue to build a midstream business of scale,” said John L. Walsh, President and Chief Executive Officer of UGI.
“This transaction expands our midstream capabilities in the prolific gas producing region of the Southwest Appalachian Basin and provides an initial investment into both wet gas gathering and processing. The CMG assets fit nicely into our strategy and further support our long-term commitments to shareholders of 6% – 10% adjusted EPS growth and 4% dividend growth.” Robert F. Beard, Executive Vice President, Natural Gas of UGI said, “Columbia Midstream Group is a well-run organization with a solid portfolio of strategic assets that enhance and build upon our existing business. We believe this acquisition is a great fit strategically, operationally and culturally, and are excited to welcome the CMG employees to the UGI family of companies.”