Sempra To Sell 45% Equity Interest In Sempra Infrastructure Partners For $10 Bln Cash

Sempra Energy

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(RTTNews) - Energy infrastructure company Sempra Energy (SRE) announced Tuesday several strategic actions that advance Sempra's corporate strategy. The company is executing on five value creation initiatives designed to simplify Sempra's business model, improve financial performance and reduce risk.

The company expects these initiatives to strengthen its ability to deliver improved earnings growth while driving enhanced benefits for customers and communities across its service territories.

Sempra announced that it has agreed to sell a 45% equity interest in Sempra Infrastructure Partners to affiliates of KKR, with Canada Pension Plan Investment Board (CPP Investments) for cash proceeds of $10 billion implies an equity value of $22.2 billion and an enterprise value of $31.7 billion for Sempra Infrastructure Partners.

Before adjustments, Sempra is expected to receive 47% of the cash at close, 41% by year-end 2027 and the balance approximately seven years after closing. This schedule will help Sempra generate attractive post-closing interest income as it efficiently reinvests proceeds over time in capital expenditures at its U.S. utilities.

The transaction is expected to close in the second or third quarters of 2026, subject to necessary regulatory and other approvals and closing conditions.

Upon closing, a KKR-led consortium will become the majority owner of Sempra Infrastructure Partners, holding a 65% equity stake, while Sempra will retain a 25% interest alongside Abu Dhabi Investment Authority's (ADIA) existing 10% stake. Under the terms of the agreement, Sempra and ADIA will have certain minority rights in Sempra Infrastructure Partners.

Looking ahead to fiscal 2025, Sempra now projects earnings in a range of $3.29 to $3.69 per share to reflect the equity sale transaction, down from the prior forecast range of $4.05 to $4.45 per share. Adjusted earnings are still expected in the range of $4.30 to $4.70 per share.

On average, 12 analysts polled expect the company to report earnings of $4.51 per share for the year. Analysts' estimates typically exclude special items.

Sempra is also affirming its full-year 2026 adjusted earnings guidance range of $4.80 to $5.30 per share. The Street is currently looking for earnings of $5.04 per share.

The company is also affirming its guidance to the high-end or above its projected long-term earnings per share compound annual growth rate of 7 to 9 percent for 2025 through 2029.

Additionally, Sempra announced that Sempra Infrastructure Partners has reached a final investment decision to advance the development, construction and operation of Port ArthurLNG Phase 2.

The incremental project capital expenditures at Phase 2 are estimated at $12 billion, plus an approximate $2 billion payment for shared common facilities, with commercial operations expected in 2030 and 2031 for Trains 3 and 4, respectively.

The funding for Phase 2 is supported by an equity investment led by Blackstone Credit & Insurance, together with an investor consortium including KKR, Apollo-managed funds and Private Credit at Goldman Sachs Alternatives.

Together these investors have acquired a 49.9% minority equity interest for $7 billion. Sempra Infrastructure Partners has retained a 50.1% majority stake in the project.

Sempra Infrastructure Partners has also contracted with global engineering, construction and project management firm Bechtel Energy, Inc. for Phase 2.

The Phase 2 is subscribed with long-term offtake under 20-year sales and purchase agreements with strategic partner ConocoPhillips as anchor, and high-quality counterparties EQT, JERA Co. Inc. and Sempra Infrastructure Partners.