February 11 filings with U.S. market regulators show that Kinder Morgan, Inc. priced its upsized initial public offer (IPO) shares offered by private equity investors at US$30 per share to raise $2.9 billion. At that level, the IPO broke prior records for U.S. private equity driven IPOs. But that record breaking performance was made even more so after the greenshoe overallotment granting 15% additional shares brought the take of the largest energy IPO in more than a decade to $3.29 billion.
Glencore International AG, recognized widely as the globe's biggest commodities trader, also is proceeding on an IPO to $10 billions via an IPO on the London and Hong Kong. Known largely for its metals trading, the firm also is a strong energy trader, which is expected to be valued near $60 billion once the deal prices.
The window for IPOs of logistics players with smaller market capitalizations has been open in the first half of 2011 as well, as the Tesoro Logistics IPO illustrates.
On April 19, underwriters assisting in the IPO of Tesoro Logistics LP, the operator of assets that support the second largest independent refining fleet in the U.S. owned by Tesoro Corporation, allocated a more-than-expected package of 13 million units at the top $21 range to gross $273 million in capital. A ten percent greenshoe covering additional shares, if underwriters elect, could add further to the company's proceeds.
Deal making does not have to be record-setting IPOs to serve the needs of the downstream logistics segment, as illustrated by the successful secondary unit offerings over the last two quarters by Plains All American ($503 million) and Buckeye Partners ($285 million) followed fourth quarter 2010 deals by Enterprise Products Partners ($528 million) and Enbridge Energy Partners ($347 million).
The storage and logistics deal pipeline is anything but closed. On March 31, Oiltanking Partners L.P. filed with U.S. regulators for an initial public offering (IPO) of common units expected to raise $200 million.
Houston-based Oiltanking Holding Americas, Inc. owns the general partnership interest and is itself a wholly owned subsidiary of Oiltanking GmbH, the world’s second largest independent storage provider, according to the filing. The filing said Oiltanking GmbH intends to make Oiltanking Partners its growth vehicle in the U.S. to acquire, own and operate terminaling, storage and pipeline assets that generate stable cash flows.
Contact the author, Greg Haas, at ghaas@hartenergy.com.
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