CorEnergy to acquire MoGas Pipeline for $125M

CorEnergy Infrastructure Trust Inc.

CorEnergy Infrastructure Trust Inc. (NYSE: CORR) has agreed to acquire the ownership and operations of the MoGas Pipeline System for $125 million in cash. This 263-mile pipeline supplies natural gas in and around the St. Louis region and to small municipalities throughout central Missouri.

“We are pleased to add an interstate pipeline to our diversified portfolio of infrastructure assets used by utilities, storage terminal operators, and natural gas producers,” said David Schulte, CEO of CorEnergy.

The MoGas Pipeline System is an interstate natural gas pipeline system which originates in northeast Missouri, and extends into western Illinois and central Missouri. The pipeline maintains receipt points with Mississippi River Transmission Corporation in eastern St. Louis and with Panhandle Eastern Pipe Line Company and Rockies Express Pipeline on the northern end of the system.

Primary customers are Laclede Gas Company, Ameren Missouri, and Omega Pipeline. Omega Pipeline is a wholly owned subsidiary of CorEnergy.

CorEnergy intends to finance the acquisition cost with a combination of borrowings under its credit facility and with proceeds from a simultaneously announced public offering of common stock.

In conjunction with the acquisition, CorEnergy signed a commitment letter to amend and upsize its current $30 million revolving senior secured credit facility. The new revolving lines of credit have anticipated capacity of up to $93 million, consisting of $90 million at the parent entity level and $3 million at the subsidiary entity level.

Additionally, subject to market and other conditions, CorEnergy plans to offer 13,000,000 shares, allowing the underwriters a 30-day option to purchase up to an additional 1,950,000 shares of the common stock, at the public offering price, less the underwriting discount. BofA Merrill Lynch and Wells Fargo Securities will act as joint book running managers for the offering. The shares are being offered pursuant to an effective shelf registration statement that the company previously filed with the US Securities and Exchange Commission under the name Tortoise Capital Resources Corp.

The acquisition is expected to close in late November 2014.

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