Private Equity's Major Acquisitions Highlighted on Thursdays
In a major move signifying growing private equity interest in strategic energy infrastructure, Brookfield Infrastructure Partners L.P. (BIP) has announced the acquisition of Colonial Enterprises, Inc. The deal, valued at approximately $9 billion, marks BIP's entry into the ownership of the largest refined products pipeline in the U.S., the Colonial Pipeline.
The Colonial Pipeline, stretching around 5,500 miles from Texas to New York, moves up to 2.5 million barrels per day and serves over 50 million consumers across 14 states, transporting roughly 45% of fuels consumed on the East Coast.
Brookfield will take full control of Colonial from a consortium of five shareholders, including Shell Midstream Operating LLC, Koch Capital Investments Company, KKR, Caisse de dépôt et placement du Québec, and IFM Investors. Shell has sold its 16.125% stake for $1.45 billion, as part of its strategy to focus on core operations.
The acquisition was funded through Carlyle Europe Partners V-a €6.4bn vehicle, and Brookfield's equity investment is about $500 million, roughly 15% of the total equity. Debt financing for the deal was led by Morgan Stanley Senior Funding and Mizuho Bank, with Morgan Stanley as sole bookrunner on the term loan facility.
The deal, expected to close by Q4 2025, has an enterprise value-to-EBITDA (TEV/EBITDA) multiple of 9x. Brookfield expects a mid-teen percentage cash yield on investment, implying a payback period of approximately seven years.
Meanwhile, rumours have been circulating about Brookfield's takeover discussions with Spanish pharmaceutical group Grifols. However, these takeover discussions have not been confirmed by either Brookfield or Grifols. If successful, this potential acquisition could result in a significant change in the ownership structure of Grifols, valued at €7 billion ($7.55 billion) in the reported bid from Brookfield.
The resumption of discussions suggests that Brookfield believes the current offer better reflects Grifols' value, following the rejection of a previous non-binding €6.7bn offer by Grifols management in November 2021. The reported bid values Grifols at €7 billion ($7.55 billion).
This news comes amidst a potential sign of continued M&A activity in the pharmaceutical industry and follows Carlyle's completion of the acquisition of SNP Schneider-Neureither & Partner SE, a global SAP-focused data transformation software and consulting services provider. The acquisition forms the basis of a strategic partnership aimed at accelerating SNP's long-term international growth.
Sources: [1] Brookfield Infrastructure Partners L.P. (BIP) - Colonial Pipeline Acquisition - Press Release (April 3, 2025) [2] Reuters - Brookfield to Buy Colonial Pipeline for $9 Billion in Latest Energy Infrastructure Deal (April 3, 2025) [3] Wall Street Journal - Shell Sells Stake in Colonial Pipeline for $1.45 Billion (April 3, 2025) [4] Financial Times - Brookfield to Buy Colonial Pipeline for $9bn (April 3, 2025) [5] Bloomberg - Shell Sells Colonial Pipeline Stake for $1.45 Billion (April 3, 2025)
- Brookfield's equity investment in the acquisition of Colonial Pipeline, valued at around $9 billion, is approximately $500 million, funded partly by Carlyle Europe Partners V-a €6.4bn vehicle.
- Debt financing for the Colonial Pipeline transaction was led by Morgan Stanley Senior Funding and Mizuho Bank, with Morgan Stanley serving as sole bookrunner on the term loan facility.
- Shell, one of the consortium shareholders of Colonial Enterprises, has sold its 16.125% stake for $1.45 billion, as part of its strategy to focus on core operations in the finance sector.
- The exit of Shell from Colonial Enterprises signals a growing interest in private equity for strategic energy infrastructure, such as the Colonial Pipeline, a refined products pipeline stretching over 5,500 miles in the U.S.
