KKR to invest in Canadian oil depot operator Torq

NEW YORK Tue Dec 24, 2013 7:00am EST

NEW YORK Dec 24 (Reuters) - Private equity firm KKR & Co LP said on Tuesday it would invest C$250 million ($235 million) in Torq Energy Logistics Ltd, an operator of transloading terminals in Canada that is benefiting from the country's resources boom.

The deal is a bet on the logistics sector that is supporting Canada's energy industry. The nature of KKR's investment was not disclosed, but a person briefed on the matter said it involved the acquisition of a majority stake in Torq.

"We believe that continued growth in the Canadian energy sector is dependent on new infrastructure solutions to bring production to market," said Brandon Freiman, a director in KKR's energy and infrastructure team.

Founded in 2011, Calgary-based Torq operates six transloading terminals in Western Canada, facilitating the transport of crude oil from the well site to the rail car. KKR said the investment would fund privately held Torq's capital expenditure program and acquisition strategy.

It is KKR's second energy-related investment in Canada in as many years following its deal in November 2012 to invest up to C$250 million in oil and gas developer Westbrick Energy Ltd.

The transaction with Torq is subject to customary closing conditions and regulatory approvals and is expected to close in January, KKR said. It will be made out of KKR North American Fund XI, which the New York-based private equity firm has said is wrapping up fundraising at more than $8.3 billion.

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