Blackstone Infrastructure Partners will pick up a nearly 20% stake in Northern Indiana Public Service Co. for a little more than $2 billion, parent NiSource announced Tuesday.
NiSource has been on the hunt for a buyer for a noncontrolling equity interest in NIPSCO since late last year. (See NiSource Selling Minority Interest in NIPSCO.) The $2.15 billion deal will have Blackstone acquiring a 19.9% stake and pledging an additional $250 million in equity to fund a pro rata share of NIPSCO’s ongoing capital needs, according to NiSource.
NiSource said the purchase will help finance NISPCO’s continuing transition to a decarbonized fleet and reinforce grid resilience while “accelerating the reindustrialization of the Midwest.” It also said Blackstone is interested in a “long-term buy-and-hold approach to large-scale infrastructure assets.”
NIPSCO said it expects to invest $3.5 billion in the grid through 2030, with most of that going to new renewable generation to replace coal-fired assets. The company said it will end reliance on coal by 2028; that’s compared to the 75% coal generation mix it employed in 2018.
The transaction is expected to close by the end of 2023, pending FERC approval.
NIPSCO President Mike Hooper said the deal will allow NIPSCO to invest in large renewable generation projects while making capital improvements to its electric and gas infrastructure.
NiSource CFO Shawn Anderson added that the utility is “confident this is the right path forward” to boost NIPSCO’s balance sheet and “navigate the current challenging interest rate backdrop” while the utility establishes a more sustainable and reliable system.
“We’re pleased to reach this agreement at a compelling valuation following a robust and competitive process and are confident that Blackstone is the right partner for NIPSCO and NiSource going forward, given its global footprint and deep infrastructure experience, including in renewable development and procurement,” NiSource CEO Lloyd Yates said in a press release. “With this transaction, our commitment to Indiana remains unchanged, and we will be able to drive further sustainable growth for our stakeholders. This financing transaction will have no impact on NIPSCO’s current strategic direction or on our commitment to our gas and electric customers in Indiana.”
Blackstone Global Head of Infrastructure Sean Klimczak said the deal “underscores Blackstone’s commitment to decarbonization to create value for our investors and our desire to help facilitate the reindustrialization of the Midwest.”
