Kinder Morgan Energy Partners LP (KMP): How Midstream Deals Get Done

Because of this relationship with its general partner, the company can, according to CEO Stanley Horton, be “very, very busy looking at acquisitions.” Boardwalk CFO Jamie Buskill took it a step further, saying: “[W]e’ve been able to utilize help from our parent. … And what it’s allowed us to do is not only grow the company but we’ve also bettered our capitalization.” Going a step further, he hinted that there is a confidence level that the company could do it again: “So it really depends on the opportunity, and I can’t speak for our parent. But as in the past, they’ve helped us if there was a big opportunity that came available.” That gives Boardwalk the flexibility to dream a bit bigger if the right deal comes along, and according to Horton, “there appears to be no shortage of opportunities.”

The ability to work with a strong parent gives both Kinder Morgan Energy and Boardwalk a strong competitive advantage when it comes to sealing a deal. If you own an MLP or are thinking about investing in one, make sure you know a bit about the general partner. That relationship will be a key to growing your investment over time, so make sure you’re investing alongside someone whose interests are best aligned with yours.

The article How Midstream Deals Get Done originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Kinder Morgan and Loews.

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