Dominion Midstream will acquire Questar Pipeline from Dominion for approximately $1.7 billion, Dominion Midstream announced Monday.
Dominion Midstream will finance the transaction by its assumption of Questar’s $435 million of outstanding debt, equity offerings, and a $300 million term loan provided by a group of banks.
"Dominion Midstream's planned acquisition of Questar Pipeline and related financing have been anticipated as part of the financing structure of the Dominion-Questar Corporation combination since it was announced in February 2016. The capital generated from the Questar Pipeline dropdown will allow Dominion to pay down debt while supporting its earnings and dividend growth targets. The dropdown will also provide Dominion Midstream with additional earnings to support its best-in-class growth rate, without another asset drop or additional equity, until the second half of 2018,” said President and CEO of Dominion and Dominion Midtream Thomas F. Farrell II according to a statement.
"This successful financing also validates our business plan for Dominion Midstream, which involves accessing the capital markets to fund the acquisition of midstream assets to support the partnership's stated intention to grow distributions by 22 percent per year,” Farrell added.
The transaction is expected to close December 1, 2016.
Dominion Midstream Partners