Kinder Morgan Energy To Buy Jones Act Shipping Tankers In U.S. For $962 Mln

(RTTNews) - Kinder Morgan Energy Partners L.P. (KMP) announced Monday that it agreed to acquire American Petroleum Tankers or APT and State Class Tankers or SCT from affiliates of The Blackstone Group and Cerberus Capital Management for $962 million in cash.

APT and SCT are engaged in the marine transportation of crude oil, condensate and refined products in the United States domestic trade, commonly referred to as the Jones Act trade.

APT's fleet consists of five medium range Jones Act qualified product tankers, each with 330,000 barrels of cargo capacity.

SCT has commissioned the construction of four medium range Jones Act qualified product tankers, each with 330,000 barrels of cargo capacity. The vessels are scheduled to be delivered in 2015 and 2016 and are being constructed by General Dynamics' NASSCO shipyard.

The transaction is expected to close in the first quarter of 2014, at which time it will be immediately accretive to cash available to KMP unitholders. The transaction is subject to standard regulatory approvals. APT currently generates about $55 million of annual EBITDA.

After completion of construction of the four SCT vessels, KMP expects combined annual EBITDA of about $140 million, which is an EBITDA multiple of 8.4 times.

The general partner of KMP, Kinder Morgan Inc. (KMI), has agreed to waive its incentive distribution amounts of $16 million in 2014 and $19 million in 2015 and $6 million in 2016 to facilitate the transaction, the company said.