NiSource to sell minority stake in NIPSCO for $2.1B
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Merrillville-based NiSource Inc. announced Tuesday it plans to sell a nearly 20% non-controlling interest in its Northern Indiana Public Service Co. subsidiary. The company said the deal with an affiliate of New York-based Blackstone Infrastructure Partners is valued at more than $2.1 billion.
“This is truly an important milestone in our efforts to strengthen our balance sheet and enable NiSource to draw upon the portfolio of capital investment opportunities to enhance shareholder value, while enhancing safety and reliability for our customers,” NiSource CEO Lloyd Yates said during a conference call with investors.
NiSource announced in November it was looking for a minority interest buyer.
The company bills NIPSCO as Indiana’s largest vertically integrated electric and gas distribution company with more than 1.3 million customers across more than two dozen Indiana counties..
Blackstone Infrastructure is an investment firm that focuses on the utility, energy transition, transportation, digital infrastructure, water and waste infrastructure sectors. NiSource said Blackstone is committed to investing in NIPSCO’s ongoing energy transition and decarbonization programs.
Yates described several key takeaways from the sale, including creating a “highly attractive and efficient source of equity financing.
“The proceeds reflect a meaningful premium to other potential sources of financing,” he said. “Any additional funding Blackstone Infrastructure is committing to will support ongoing capital needs, including the renewable transition is currently underway.”
Yates outlined four key takeaways from the transaction.
NIPSCO is in the midst of eliminating its coal-fired generation operations by 2028, and plans to make $3.5 billion in electric generation transition investments with a primary focus on renewable energy sources.
The sale is expected to be complete by the end of the year. Upon closing, NiSource will retain an 80.1% stake in NIPSCO and will continue to operate the utility. The company said Blackstone will make an additional $250 million equity commitment to fund ongoing capital requirements.
“This agreement underscores Blackstone’s commitment to decarbonization to create value for our investors and our desire to help facilitate the reindustrialization of the Midwest,” Sean Klimczak, global head of infrastructure for Blackstone, said in written remarks. “Our belief in Indiana remains steadfast, and we are excited to partner with NiSource and NIPSCO, one of the fastest growing utilities in the country, to support the vital role that NIPSCO plays in communities across northern Indiana.”
The sale remains subject to regulatory approvals and clearances, as well as customary closing conditions.