Morgan Stanley and Sterling Energy Announce Strategic Partnership

Morgan Stanley Private Equity and Denver-based Sterling Energy have announced a strategic partnership to form Sterling Investment Holdings. The new entity will build and acquire gas pipelines and other midstream assets in Colorado and North Dakota. Sterling Investment acquires substantially all the assets of Sterling Energy, and Morgan Stanley owns a majority interest in the new entity. Terms of the transaction were not disclosed. "The company's drilling activity is growing so rapidly that the need for equity was clear to our management," said Bill Penney, CEO of Sterling Energy, a privately-owned natural-gas gathering and transmission company. Members of the Sterling Energy management team have previously collaborated with Morgan Stanley Private Equity in a series of successful midstream companies dating back to 1991, including Cantera Natural Gas, Canyon Gas Resources, Highlands Gas Corporation and Mountain Gas Resources. Morgan Stanley Private Equity is the direct buyout arm of Morgan Stanley MS. To date, the firm and its funds have invested approximately $7.9 billion of equity across a broad spectrum of industries.