ET - Energy Transfer Continues Its Acquisition Binge With This $3.3 Billion Deal (Giving It a Lot More Fuel to Increase Its High-Yielding Payout)
2024-05-29 05:43:00 ET
Energy Transfer (NYSE: ET) continues to lead the midstream sector's consolidation. The master limited partnership (MLP) made two deals last year and recently followed them up with its first acquisition in 2024. It's paying nearly $3.3 billion to buy WTG Midstream.
Its latest deal perfectly aligns with its acquisition strategy of finding accretive transactions that enhance its value chain without negatively impacting its balance sheet. That approach should continue paying dividends for investors by giving the MLP the fuel to keep growing its high-yielding distribution (currently over 8%).
Energy Transfer is buying WTG Midstream for roughly $2.5 billion in cash and 50.8 million units (nearly $3.3 billion) . That deal structure positions Energy Transfer to earn strong equity returns while maintaining its targeted leverage ratio . The company expects the highly accretive deal will boost its distributable cash flow per unit by $0.04 per share in 2025, increasing to $0.07 per unit by 2027.
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Energy Transfer Continues Its Acquisition Binge With This $3.3 Billion Deal (Giving It a Lot More Fuel to Increase Its High-Yielding Payout)