PE Deals

TC Energy to sell Columbia Gas, Columbia Gulf interest to GIP

The deal is expected to generate total proceeds of C$5.2 billion ($3.9 billion) in cash.

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  • TC Energy is a Calgary-based energy infrastructure company
  • The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across an integrated North American natural gas network
  • GIP specializes in investing in assets across the energy, transport, digital infrastructure and water and waste management sectors

TC Energy Corp has agreed to sell a 40 percent interest in its Columbia Gas Transmission, and Columbia Gulf Transmission systems to Global Infrastructure Partners (GIP).

The deal, which will result in Columbia Gas and Columbia Gulf being held in a new joint venture partnership with GIP, is expected to generate total proceeds of C$5.2 billion ($3.9 billion) in cash. It is expected to close in the fourth quarter of 2023, subject to customary closing conditions.

TC Energy is a Calgary-based energy infrastructure company with operations in natural gas, oil and power industries. The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across an integrated North American natural gas network.

The value of the 40 percent equity interest suggests an enterprise value to a comparable EBITDA multiple of around 10.5 times TC Energy’s base 2023 outlook and expected run-rate capital structure for the partnership entity.

TC Energy and GIP will jointly invest in annual maintenance, modernization and sanctioned growth capital to further enhance system capacity and reliability.

TC Energy expects to undertake a recapitalization and debt restructuring of Columbia Gas and Columbia Gulf as part of the transaction.

“We are pleased to partner with TC Energy on energy infrastructure assets that are critical to the North American and global natural gas markets,” said Bayo Ogunlesi, GIP’s chairman and CEO, in a statement. “We welcome the opportunity for this joint venture to leverage the combined assets and capabilities of TC Energy and GIP to serve growing market needs for cleaner fuels, energy security and energy affordability.”

GIP is an infrastructure investment firm specializing in investing in assets across the energy, transport, digital infrastructure and water and waste management sectors. The firm, headquartered in New York, has around $100 billion in assets under management.