TULSA, Okla. (AP) _ ONEOK Inc. on Friday successfully completed the purchase of natural gas liquids businesses owned by several units of Koch Industries Inc. for approximately $1.35 billion.
``The acquisition is consistent with our growth strategy and is a perfect fit with our existing businesses,'' said David Kyle, ONEOK chairman, president and chief executive officer. ``It adds a new segment to our operations, giving us the ability to create additional value.''
Overall, the transaction is expected to generate about $135 million to $145 million in primarily fee-based earnings before interest, taxes, depreciation and amortization in 2006, when the benefits of renegotiated contracts and additional contracted volumes are fully realized, according to Tulsa-based ONEOK.
Initial financing of the transaction will be through a $1 billion bridge loan with the remainder financed under the company's commercial paper program or borrowings under its existing $1 billion, five-year credit agreement. Permanent financing of the acquisition is expected to come from a combination of available cash, issuance of long-term debt and proceeds from the settlement of the company's equity units in February 2006. The company may also use proceeds from the sale of less strategic assets.
The businesses acquired give ONEOK a natural gas liquids system that connects much of the supply located in Oklahoma, the Texas Panhandle and Kansas with the two key market centers in Conway, Kan., and Mont Belvieu, Texas.
ONEOK also announced a shakeup in staffing related to the deal with Wichita, Kan.-based Koch.
Of the 207 current Koch employees, 191 will join ONEOK as part of the transaction. The majority of the employees will remain in field locations, with commercial and accounting activities being transferred to Tulsa from Wichita.
ONEOK named Terry Spencer senior vice president of its new Natural Gas Liquids segment. A group of other changes were made in senior management to meet the new natural gas liquids business, Kyle said.