Boardwalk Pipeline Partners LP (BWP.N) said it and a unit of its general partner Loews Corp (L.N) have agreed to form a joint venture to buy pipeline transportation company PL Midstream LLC for $625 million in cash, making a foray into the natural gas liquids business.
Boardwalk said it will take a 33 percent stake in the joint venture, while a wholly owned unit of Loews, Boardwalk Pipelines Holding Corp (BPHC), will own 67 percent.
The deal will be funded through a $225 million bank loan and equity contributions from the two partners, with BPHC expected to contribute about $268 million and Boardwalk $132 million.
The joint venture is buying PL Midstream LLC from private equity firm Lindsay Goldberg LLC's portfolio company PL Logistics LLC.
"The PL Midstream acquisition supports our long-term growth strategy of diversifying into industries that complement our core natural gas pipeline and storage businesses," Boardwalk Chief Executive Stan Horton said in a statement.
Barclays was the financial adviser to Boardwalk and Wells Fargo Securities advised PL Midstream on the deal, which is expected to close in late September or early October.
Boardwalk Pipeline shares closed at $27.09, while those of Loews closed at $40.52 on Thursday on the New York Stock Exchange.
(Reporting by Eileen Anupa Soreng in Bangalore; Editing by Chris Gallagher)