Kinder Morgan, the largest refined petroleum products operator in North America, filed new documents with regulators today giving a little more color on its upcoming initial public stock offering. It set the size of the deal at 80 million shares and is telling us there will be 707 million shares outstanding after the offering. It didn’t give us a range yet for the size of the offering but this will clearly be a deal that places a market cap on the company at more than $10 billion. This blogger surmises that because one number the company did give was its expected dividend payout: $1.16 a year or a total of $820 million in dividend payouts.
If the market cap was $10 billion, that would be an 8.2% dividend payout – and we shouldn’t expect a dividend yield that high.
The company’s structure is a little complex – a bunch of units and partnerships pay distributions to the holding company, which is what is going public. Some of the private equity firms and a Wall Street firm that took the company provate a few years back will be the sellers of stock in this offering. No proceeds go back into the business. And some of these investors have made out pretty well already – Goldman Sachs ows 25% of the shares before the offering. The company said it has paid out $1.35 billion in dividends over the past two years. That would indicate Goldman has taken in $337.5 million in dividends. Plus it will sell about 5% of the stock it owns in this offering.
The private equity firms selling stock (and also having received nice dividend payouts) include: Highstone Capital, Carlyle Group and Riverstone Holdings.