DALLAS - EnLink Midstream, LLC (NYSE: NYSE:ENLC), a Dallas-based midstream services provider, has undergone a significant change in its Board of Directors following a recent transaction with ONEOK , Inc. (NYSE: NYSE:OKE). On October 15, 2024, ONEOK acquired Global Infrastructure Partner's 43% equity interest in EnLink Midstream, as well as its interest in the managing member of EnLink, EnLink Midstream Manager, LLC.
This acquisition has led to the appointment of three ONEOK representatives to the EnLink Board, with Pierce H. Norton II taking on the role of Board Chairman and Chairman of the Governance and Compensation Committee. Walter S. Hulse III will join the Sustainability Committee, and Lyndon C. Taylor will be part of the Governance and Compensation Committee. Leldon E. Echols will maintain his position as the Lead Independent Director.
The new board members replace Matthew C. Harris, Benjamin M. Daniel, and Scott E. Telesz, all of whom were associated with Global Infrastructure Partners. Jesse Arenivas, President and CEO of EnLink, expressed gratitude for GIP's past contributions and welcomed the new directors, highlighting their extensive experience in the midstream and energy sectors.
Norton's background includes serving as the President and CEO of ONEOK and ONE Gas (NYSE:OGS), Inc. Hulse brings financial expertise from his time at ONEOK and as a consultant, while Taylor's legal background includes roles at Devon Energy Corporation (NYSE:DVN) and the founding of Skadden Arps' Houston office.
EnLink Midstream specializes in providing integrated midstream services for natural gas, crude oil, condensate, and NGLs, as well as CO2 transportation for carbon capture and sequestration. ONEOK, now the managing member of EnLink, is a leading midstream service provider operating a significant pipeline network across North America.
The information regarding this board restructuring is based on a press release statement from EnLink Midstream.
In other recent news, EnLink Midstream has experienced a series of significant developments. The company's Q3 EBITDA is expected to reach $325 million, slightly below the average estimate of $330 million, according to Citi. Furthermore, the company has entered into a Credit Agreement Amendment in anticipation of ONEOK's impending acquisition of equity interests in EnLink. EnLink Midstream has also finalized an agreement for a public offering of $500 million in senior notes, guaranteed by its subsidiary, EnLink Midstream Partners, LP.
Recent analyst notes reveal that EnLink Midstream's stock was downgraded from Overweight to Equalweight by both Morgan Stanley and Wells Fargo, with a price target set at $15.00. This adjustment comes after ONEOK's announcement to acquire a controlling interest in EnLink Midstream.
ONEOK, Inc. has agreed to acquire Global Infrastructure Partners' controlling interest in EnLink Midstream, a transaction that includes an acquisition of all equity interests in both EnLink Midstream and its subsidiaries. This deal, expected to close in late 2024, will significantly expand ONEOK's midstream services.
These recent developments illustrate EnLink Midstream's strategic focus on financial maneuvering and asset expansion, as well as its resilience in the face of changing market conditions.
InvestingPro Insights
EnLink Midstream's recent board restructuring following ONEOK's acquisition of a significant equity stake comes at a time when the company is showing strong financial performance. According to InvestingPro data, EnLink has a market capitalization of $6.71 billion and has been trading near its 52-week high, with the stock price at 98.65% of its peak.
The company's financial health appears robust, with revenue of $6.83 billion in the last twelve months as of Q2 2024. EnLink has maintained a solid gross profit margin of 30.08% and an operating income margin of 9.46% during this period. These figures suggest that the company has been effectively managing its operations despite challenges in the energy sector.
InvestingPro Tips highlight that EnLink has maintained dividend payments for 11 consecutive years, demonstrating a commitment to shareholder returns. The current dividend yield stands at 3.61%, which may be attractive to income-focused investors. Additionally, the company has shown a strong return over the last five years, aligning with its recent stock performance.
It's worth noting that EnLink is trading at a high P/E ratio of 45.14, which could indicate investor confidence in future growth prospects, possibly influenced by the strategic changes brought about by ONEOK's involvement. The company's profitability over the last twelve months and analysts' predictions of continued profitability this year further support a positive outlook.
For investors seeking a deeper understanding of EnLink's financial position and future potential, InvestingPro offers 10 additional tips that could provide valuable insights into the company's investment profile.
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