we are raising our fair value estimate to 33 per share from 32 after nisource ni announced a deal to sell a 199 interest in its largest subsidiary nipsco to blackstone infrastructure partners we are reaffirming our narrow moat and stable moat trend ratings for nisource the stock trades at a 17 discount to our updated fair value estimate the longanticipated transaction priced far above our expectations at 215 billion implying a 108 billion equity value for nisource’s indiana gas and electric utility which contributes about half of nisource’s total earnings nisource’s consolidated market cap including its six gas distribution utilities was 113 billion as of june 16 we had expected 15 billion of proceeds based on current utilities sector valuations at 32 times earnings the deal is one of the richest ever for a regulated utility and an 80 premium to the utilities sector median and nisource’s 175 pe as of june 16 this confirms our view that nisource deserves a premium valuation because of its clean energy growth opportunities and constructive regulation in indiana despite the premium price the incremental value for nisource shareholders is limited because of the small relative size of the deal and nisource’s need to reduce debt with about half of the proceeds the remaining proceeds and ongoing equity contributions from blackstone will help fund what we expect will be 15 billion of capital investment during the next five years in line with management’s plan on a consolidated basis we forecast 7 average annual earnings growth during the next five years in line with management’s 68 target and among the top half of us utilities in our coverage constructive regulatory outcomes at nisource’s six gas utilities and a recent electric rate settlement at nipsco provide good earnings growth visibility for 2023 and 2024 we expect earnings dilution from the blackstone deal to keep consolidated earnings mostly flat in 2024