Enbridge (ENB) said late Wednesday it will acquire Tallgrass Energy's crude oil business in a $2.55 billion cash deal.

The deal comprises 75% of Pony Express Pipeline, 51% of the Powder River Gateway system, around 8.4 million barrels of storage capacity, and the Stanchion Energy crude marketing business, according to a statement.

The company said it expects the acquisition to generate significant free cash flow, support future growth, and create opportunities for operational synergies across its liquids pipeline network.

The transaction is expected to close late this year, the company said, adding that it also reiterated its medium-term outlook of around 5% compound average growth in EPS and EBITDA.

Separately, the company stated that it launched a bought-deal offering of 38.9 million common shares at CA$66.85 ($48.42) apiece for gross proceeds of CA$2.6 billion.

Net proceeds from the offering, which is expected to close on Sept. 14, will be used to fund acquisitions and repay outstanding debts, according to a statement.

The company will grant the underwriters a 30-day overallotment option to purchase up to an additional 15% of the shares offered, the company said.