Blackstone Infrastructure Partners, an affiliate of Blackstone, has acquired a 19.9% non-controlling equity interest in NIPSCO Holdings II, which owns all the equity interests of NIPSCO, in exchange for $2.16bn, and an additional $250m equity investment
NiSource divests minority stake in NIPSCO. (Credit: Nikola Johnny Mirkovic on Unsplash)
US-based utility NiSource has completed the sale of a 19.9% indirect equity interest in Northern Indiana Public Service Company (NIPSCO) to an affiliate of Blackstone for $2.16bn.
Blackstone Infrastructure Partners, an affiliate of Blackstone, has acquired a 19.9% non-controlling equity interest in NIPSCO Holdings II, which owns all the equity interests of NIPSCO.
In addition to the consideration of $2.16bn, Blackstone will make an additional $250m equity investment for ongoing capital requirements.
NiSource intends to use the capital investment to support its utility and ability to serve customers, strengthen its balance sheet and fund ongoing capital needs.
NiSource president and CEO Lloyd Yates said: “The transaction strengthens our balance sheet, supports our financing plan and provides greater flexibility to execute high-quality capital investments that will enhance the safety, reliability and sustainability of our gas and electric systems for the benefit of our customers.
“It’s important to reinforce that our commitment to Indiana remains unchanged, and we will continue to drive sustainable growth for our stakeholders.
“This financing transaction will have no impact on NIPSCO’s current strategic direction or on our commitment to our gas and electric customers in Indiana.”
NIPSCO has been executing transitions from coal-fired electricity in the US utility sector since 2018 and aims to achieve a 0% coal-fired generation mix by 2028.
The company expects to make significant investments in its electric generation transition through 2030 to install new renewable generation to replace coal-fired generation retirements.
In addition, NIPSCO is also planning to support the continued growth and upgradation of its gas and electric transmission and distribution systems.
Lazard Freres & Co. served as lead financial advisor, Goldman Sachs & Co. as co-financial advisor and McGuireWoods as legal counsel to NiSource on the transaction.
Barclays served as financial advisor and Latham & Watkins and Paul, Weiss, Rifkind, Wharton & Garrison as co-legal counsel to Blackstone.
Sumitomo Mitsui Banking Corporation offered committed financing for the transaction.
Blackstone Infrastructure senior managing director Sebastien Sherman said: “We are incredibly excited to close this transaction and to begin our long-term partnership with NiSource and NIPSCO.
“This investment underscores Blackstone’s commitment to decarbonisation to create value for our investors and our desire to help facilitate the reindustrialisation of the Midwest.
“We are excited to invest behind NIPSCO, one of the fastest-growing utilities in the country with one of the nation’s fastest decarbonisation plans.”