Oneok, Inc. (NYSE: OKE) has announced the sale of its three wholly owned interstate natural gas pipeline systems to DT Midstream, Inc. (NYSE: DTM) for a total cash consideration of $1.2 billion. The purchase price represents 10.8 times the previous 12 months EBITDA as of June 30, 2024, based on Federal Energy Regulatory Commission (FERC) filings.
The transaction, which is subject to customary closing conditions, including Hart-Scott-Rodino Act clearance, is expected to close in the fourth quarter of 2024. Oneok's President and CEO, Pierce H. Norton II, stated that this move will align and enhance their capital allocation priorities within their integrated operating footprint.
The three interstate pipeline systems being sold include Guardian Pipeline, L.L.C., Midwestern Gas Transmission, and Viking Gas Transmission. Upon closing of the transaction, the net proceeds from the sale are expected to enhance Oneok’s financial flexibility and contribute to their deleveraging trend toward the previously announced target of 3.5 times during 2026.
As of October 15, 2024, Oneok is the managing member of Enlink Midstream, LLC (NYSE: ENLC) and owns 43% of Enlink’s outstanding common units. Oneok is an S&P 500 company headquartered in Tulsa, Oklahoma and provides gathering, processing, fractionation, transportation, and storage services through its more than 50,000-mile pipeline network. As a result of these announcements, the company's shares have moved 0.3% on the market, and are now trading at a price of $117.05. If you want to know more, read the company's complete 8-K report here.
