NiSource Divests 19.9% Stake In Indiana-Based Unit To Blackstone For $2.15B

NiSource Inc NI has inked a pact with Blackstone Inc. BX to sell a minority stake of 19.9% in its NIPSCO unit for $2.15 billion.

NiSource will use the proceeds from the divestment to de-lever its balance sheet.

The transaction implies an equity value of $10.8 billion and an enterprise value of $14.3 billion for 100% of NIPSCO. NIPSCO is Indiana's largest vertically integrated electric and gas distribution company, providing critical utility service to almost 1.3 million customers.

Blackstone Infrastructure Partners, a unit of Blackstone, will participate in the deal with an additional equity commitment of $250 million to fund ongoing capital requirements. The deal will close by the year-end.

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Through 2030, NIPSCO expects to invest approximately $3.5 billion in electric generation transition investments. With the latest deal, the companies will fund the energy transition and accelerate the reindustrialization of the Midwest.

 NiSource reaffirmed its commitment to Indiana and its consolidated credit, earnings, and growth commitments through 2027. 

"We are confident this is the right path forward to strengthen our balance sheet, support our financing plan and provide greater flexibility to execute on high-quality capital investments that will enhance the safety, reliability and sustainability of our systems for the benefit of our customers," said Shawn Anderson, NiSource's executive vice president and CFO.

Guidance: NiSource also reaffirmed its non-GAAP NOEPS guidance of $1.54 to $1.60 in 2023, growth of 6-8% through 2027 and its FFO/debt target of 14-16%. 

Price Action: NI shares are trading higher by 0.84% to $27.61 on the last check Tuesday.