Macquarie Infrastructure to fully acquire IMTT
08 July 2014
Macquarie Infrastructure Co LLC said it would acquire the 50-per cent stake in liquids storage provider International-Matex Tank Terminals (IMTT) that it did not control for $1.03 billion in cash and stock, Reuters reported.
Macquarie, which has owned half of IMTT since 2006, said it expected the deal to add to its free cash flow this year, given "a number of opportunities" to implement better expense controls and processes at the liquids storage provider.
The company offered to pay $910 million in cash and the rest in stock to buy out the remaining stake from IMTT's founding Coleman family, of whom at least three of would retire after the closure of the deal later this month.
The company operates 10 marine terminals in the US and two partially-owned terminals in Canada that store and handle petroleum products, vegetable and tropical oils, renewable fuels, and other chemicals.
According to Macquarie, it expected the deal to partly eliminate double taxation as the company would no longer pay federal taxes and Macquarie would no longer pay tax on the distributions it got from IMTT.
The company raised its 2014 underlying free cash flow forecast, excluding transaction-related expenses to $4.55 per share, around 11.2 per cent higher than 2013.
The move is seen as an expansion by Australia's largest investment bank of its North American businesses, Bloomberg reported.
Macquarie expects the deal to also boost quarterly dividends.
The acquisition comes as the latest transaction in the terminals business for Macquarie.
In August, the bank agreed to buy 45 per cent of Singapore's Helios Terminal Corp from Oiltanking Gmbh for an undisclosed sum. The company also bought ANZ Terminals for A$525 million ($492 million), according to the Australian Financial review.
Bloomberg quoted David Ellis a Sydney-based analyst at Morningstar Inc as saying by phone that there had been an emphasis on the commodities business as Macquarie saw it as a stable business in the long run. He added, it played into their strategy to boost steady revenue streams to offset the cyclical nature of their advisory and equity trading businesses.
The accord has been struck following disagreement and arbitration that stretched over years, between Macquarie and other investors, including members of the Coleman family, according to US regulatory filings.