When Kelcy Warren and his partner, Ray Davis, started Energy Transfer Partners LP, a Dallas-based natural pipeline business in 1995, they were fortunate to not know what they were getting into.
“If we had known what we were tackling, we would have been completely intimidated by it and probably would not have been successful,” says Warren, the company’s chairman and CEO. “We attacked it with energy because we didn’t realize it was a mountain that few had ever climbed before. I’m very pleased with that. Our naive approach to business has been quite a strength for us.”
Energy Transfer, which reported revenue of $7.9 billion in fiscal 2006, was one of many energy companies that benefited from the collapse of energy giant Enron in 2002. Energy Transfer had a great team and was happily small but began to see great opportunity in 2002.
“When we began to see these wonderful assets flood into the market because of these financial failures … we were able to seize upon that, and I’m very proud of what we’ve done,” Warren says.
Little did he know at the time just how big the company would become by gobbling up similar companies and combining their assets with Energy Transfer’s own to fuel its growth. Since 1995, Warren has been involved in six major acquisitions, helping build Energy Transfer into the company it is today.
Here’s how Warren navigated his way through the challenges that acquisitions can bring.