VANCOUVER (CP) -- U.S. pipeline giant Kinder Morgan Inc. [NYSE:KMI] has closed the sale of its Terasen water and utility services business for C$124 million to a group that includes the Vancouver company's management and a major B.C. pension fund.
Houston-based Kinder Morgan said Monday it had sold control of the unit, which provides water, wastewater and utility products and services in western Canada, to a group led by CAI Capital Management Co., a private equity firm.
The partnership also includes the existing management team of Terasen Water and the British Columbia Investment Management Corp., a provincial public sector pension fund manager with C$76 billion in assets.
The sale does not include CustomerWorks LP, a joint venture owned 30% by Kinder Morgan and 70% by Enbridge Inc. [TSX:ENB; NYSE:ENB] of Calgary.
The sale of Terasen Water comes in the wake of Kinder Morgan's multibillion-dollar takeover last year of Vancouver-based Terasen Inc., a company formerly known as BC Gas. Terasen operates a natural gas utility in British Columbia and has pipelines and other energy interests.
''When we acquired Terasen last year, we noted that the water and utility services business was outside of our core asset base of pipelines and terminals,'' Richard Kinder, chairman and CEO of Kinder Morgan, said in a release. ''After conducting a thorough review of these assets, we determined that this sale would be in the best long-term interest of both KMI and Terasen Water and Utility Services.''
Terasen Water is a utility infrastructure product and service provider with more than 900 employees which make the pipes, valves, fittings, and systems that treat and transport water and wastewater. Its customers include municipalities, resort communities, institutions, builders, developers and water and energy utilities in Canada and the United States.
''The growth over the past few years and the future prospects for the utility infrastructure business in North America are very impressive'', said Tracey McVicar, managing director of CAI. ''We are supportive of the strategic direction of this company and we are prepared to invest additional capital to help grow this business.''
Lincoln Webb, vice-president of private placements for B.C. Investment Management, said ''we are attracted to this investment because of its strong base earnings and growth, and the focus on long-term, sustainable utility infrastructure solutions in an industry that requires substantial investment over the coming years.''
(c) The Canadian Press 2006
