Kinder Morgan files $1.5bn IPO

Goldman Sachs, Carlyle Group, Highstar Capital and Riverstone Holdings took the pipeline and storage terminal operator private in a $22bn deal.

The parent company of pipeline and storage terminal operator Kinder Morgan Partners has filed for an initial public offering that could raise as much as $1.5 billion.

Shares being sold in the offering are owned by private equity firms that took the company private in a $22 billion deal in 2007. Those firms are Goldman Sachs, The Carlyle Group, Riverstone Holdings and Highstar Capital.

The firms together own more than 60 percent of the company's shares, according to a filing with the US Securities and Exchange Commission.

Kinder Morgan Holdings will not receive any proceeds from the offering, which is being managed by Goldman Sachs and Barclays Capital.

Pipeline IPO

A Kinder Morgan spokesperson declined to comment on the offering.

It is unclear when Kinder Morgan Holdings will offer its shares. Once it does, however, the company plans to convert itself from a limited liability company to a corporation and rename itself Kinder Morgan Inc. It plans to trade on the New York Stock Exchange under the ticker “KMI”, according to the filing.

Kinder Morgan Holdings is the general partner and owner of about 11 percent of Kinder Morgan Energy Partners, a publicly traded master limited partnership that owns most of the assets and operations of the company. Through Kinder Morgan Energy Partners and other subsidiaries, Kinder Morgan Holdings owns or operates 37,000 miles of pipelines and approximately 180 petroleum and chemical storage terminals.

The Kinder Morgan deal in 2007 included roughly $7 billion in assumed debt and $7 billion in newly issued debt. The four groups of funds and Kinder Morgan management contributed roughly $8 billion to the deal, a spokesperson told PEO at the time of the transaction.

Kinder Morgan Holdings reported revenues of $7.2 billion in 2009, versus $12.1 billion for 2008, according to the regulatory filing. Operating revenue, or revenue minus the company’s operating costs, amounted to $1.4 billion in 2009, versus a loss of $2.5 billion in 2008.