Williams Cos. adds core infrastructure for LNG buildout following Gulf Coast storage acquisition – BofA

BofA analysts maintained a $41 price target and Buy rating on Williams Cos. (WMB) in a note Friday, stating that the $2 billion Gulf Coast storage acquisition adds core infrastructure for the LNG buildout.

Before the market open on Wednesday, WMB announced that it had reached an agreement to acquire a portfolio of natural gas storage assets from an affiliate of Hartree Partners L.P. for $1.95 billion.

Analysts at BofA, who headed the note, explained that the deal includes six underground, regulated natural gas storage facilities in Louisiana and Mississippi, which expands WMB’s storage capacity by 115 Bcf (from 290 Bcf) and adds 230 miles of gas pipelines with 30 connection points to systems on its Louisiana GC network as well as to new markets.

The deal is expected to close in January 2024.

“In our view, the multiple is reasonable when considering similar transactions such as DTM/Millennium (~10x), WMB/Nortex (“<10x”), and KMI/Stagecoach (~11x),” concluded the analysts at BofA.