Dominion Midstream Partners LP has entered into agreements with affiliates of National Grid plc and New Jersey Resources Corp. to acquire their ownership interests in Iroquois Gas Transmission System.
As part of the agreements, National Grid and New Jersey Resources would contribute their combined 25.93 percent ownership interests in Iroquois to Dominion Midstream in exchange for the issuance of approximately 8.6 million common units in Dominion Midstream, having an agreed-upon value of approximately $286.5 million. Dominion Midstream has no plans to acquire the ownership interest in Iroquois currently held by Dominion Gas Holdings LLC, a wholly owned subsidiary of Dominion Resources Inc.
Under these agreements, approximately 6.8 million units (representing approximately $225.4 million at the agreed-upon unit price) would be issued to National Grid, and approximately 1.8 million units (representing approximately $61.1 million at the agreed-upon unit price) would be issued to New Jersey Resources. National Grid and New Jersey Resources have agreed to certain transfer restrictions applicable to such units including, with certain exceptions, a general one-year lockup period, and would be granted certain registration rights and piggyback registration rights with respect to future Dominion Midstream equity offerings. No public market issuance of units is planned in connection with these transactions.
“This is an excellent example of what we have laid out as our core strategy since Dominion Midstream’s IPO – that is, to achieve best-in-class growth through the acquisition of high-quality, stable, regulated midstream gas infrastructure,” said Thomas F. Farrell II, chairman, president and CEO of Dominion Resources and Dominion Midstream GP. “Dominion knows Iroquois well, and Dominion Midstream is pleased to acquire a stake in this well-run, safety-conscious pipeline system. We also welcome National Grid and New Jersey Resources as partners in Dominion Midstream.”
Iroquois Gas Transmission System LP, is a Delaware limited partnership that owns and operates a 416-mile, FERC-regulated natural gas transmission pipeline extending from the Canada-United States border near Waddington, New York, through New York and Connecticut to South Commack, New York, on Long Island and Hunts Point, New York and in the Bronx.
The closing of both transactions is subject to clearance under the Hart-Scott-Rodino Act.