KA Energy Infrastructure Fund, KA NextGen Energy & Infrastructure to merge

KA Fund Advisors, which serves as the investment adviser to Kayne Anderson Energy Infrastructure Fund and Kayne Anderson NextGen Energy & Infrastructure announced that KYN and KMF have entered into a definitive merger agreement to combine the two funds. Pursuant to this agreement, KMF will be acquired by KYN. The Merger has been unanimously approved by each fund’s Board of Directors and is subject to KYN and KMF stockholder approval. Key highlights of the Merger and related transactions include: Combined entity positioned to capitalize on favorable industry outlook and navigate current market conditions; KMF common stockholders to be issued KYN common stock in NAV-for-NAV exchange; Merger expected to qualify as a tax-free reorganization and is not expected to be a taxable event for KYN or KMF stockholders; KMF to conduct a tender offer for 15% of its outstanding shares prior to closing of the Merger;Kayne Anderson agrees to implement new management fee waivers for KYN; In a separate announcement earlier today, KYN announced a one cent per share increase to its quarterly distribution rate; and KYN management intends to recommend an additional one cent per share increase to KYN’s quarterly distribution rate once the Merger is completed. The Merger has been unanimously approved by each fund’s Board of Directors, having determined that it is in the best interests of each fund. KYN and KMF expect the Merger to be completed during fiscal 2023, subject to obtaining KYN and KMF stockholder approval, compliance with all regulatory requirements and the satisfaction of customary closing conditions. Kayne Anderson anticipates sending offering and proxy materials to stockholders during the second quarter of fiscal 2023, with the stockholder meetings to approve the Merger scheduled to take place on June 20, 2023. The record date for the stockholder meetings is March 27, 2023. Upon completion of the Merger, the outstanding common stock of KMF will be exchanged for newly issued common stock of KYN, with KYN acquiring substantially all the assets and liabilities of KMF. The exchange ratio will be based on the relative per share net asset values of each fund immediately prior to the Merger’s closing date. As of March 24, 2023, KYN’s NAV per share was $9.51, and KMF’s was $8.41. For illustrative purposes, if these were the per share NAVs on the day prior to closing of the Merger, then KMF stockholders would be issued approximately 0.884 shares of KYN for each share of KMF. The Merger is expected to qualify as a tax-free reorganization for federal income tax purposes and, as a result, it is not expected to be taxable to stockholders of KYN or KMF. KYN is not expected to incur any incremental income tax liability related to the Merger.