KMP acquires Global Materials Services
Nov 1, 2004 12:00 PM
Kinder Morgan Energy Partners LP has acquired Global Materials Services LLC (GMS) for about $33.5 million in cash plus $37.4 million of debt and assumed liabilities. GMS operates a network of 21 river terminals and two rail transloading facilities primarily along the Mississippi River system, which serve as loading, storage, and unloading points for various bulk commodity imports and exports.
“This transaction is expected to be immediately accretive to earnings and cash flow at KMP and produce approximately $12 million per year in distributable cash flow,” said Richard D Kinder, KMP chairman, chief executive officer, and president. “Combining the GMS upper-river terminals with our existing lower-river facilities makes KMP the largest inland terminal operator in America. This acquisition will provide our new and existing customers increased flexibility and enable them to access our national network of deep-sea and inland-river terminals.”
KMP intends to invest another $9.4 million over the next two years to expand and upgrade the terminals, which are in 11 mid-continent states. With the addition of these 21 facilities, KMP now owns or operates about 120 terminals that generate fees for handling bulk products like coal, petroleum coke, cement, salt, and fertilizers; and storing liquids such as gasoline, jet fuel, diesel, and petrochemicals.
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