NiSource to sell minority interest in Nipsco to Blackstone affiliate for $2.15B

NiSource (NI) announced that it has entered into a definitive agreement with an affiliate of Blackstone Infrastructure Partners, Blackstone’s (BX) dedicated Infrastructure group, for the Blackstone Infrastructure affiliate to acquire a 19.9% equity interest in Nipsco for $2.15B. The transaction is a form of equity financing. NiSource intends to use the capital infusion to support its utility and its ability to serve customers, de-lever its balance sheet and fund ongoing capital needs associated with the renewable generation transition underway. Since 2018, Nipsco has been executing on one of the fastest transitions from coal-fired electricity in the U.S. utilities sector, targeting 0% coal-fired generation mix by 2028. Through 2030, Nipsco expects to invest approximately $3.5B in electric generation transition investments, with this investment primarily focused on installing new renewable generation to replace coal-fired generation retirements. Nipsco also intends to support the continued growth and modernization of its gas and electric transmission and distribution systems, which will play critical roles in the energy transition as Nipsco continues to deliver a reliable, diverse and sustainable energy mix, bringing customer, environmental and economic benefits. The transaction implies an equity value of $10.8B and enterprise value of $14.3B for 100% of Nipsco. Upon closing of the transaction, which is expected by the end of 2023, Nipsco will remain a vital part of NiSource, which will retain an 80.1% stake in Nipsco. NiSource will continue to operate Nipsco; Blackstone will receive minority rights that are commensurate with its 19.9% equity ownership interest. As part of the transaction, Blackstone is committed to funding its pro rata share of ongoing capital requirements, which is supported by a $250M equity commitment letter and contractual obligations. The transaction is expected to close by year-end 2023, subject to customary closing conditions, including receiving FERC approvals and clearances.