Brookfield Infrastructure Partners L.P.
) has entered into an agreement with an undisclosed buyer to sale
its interest in the U.S. Pacific Northwest timberland operations.
The total deal value was $790 million. This transaction will help
the partnership to generate $470 million, after paying a debt of
roughly $320 million. The divesture is expected to close in Jul
It is evident from Brookfield Infrastructure's activities that
the partnership strongly follows strong timber assets divestment
strategy. On Jun 7, 2013, the partnership completed the sale of
the remainder of its Canadian BC Coastal timberland operations.
Brookfield Infrastructure generated net proceeds of approximately
$170 million from this deal.
With the present divesture, Brookfield Infrastructure has sold
its entire timberland assets primarily due to lower-than-expected
return. In first-quarter 2013, timber segment reported net income
and funds from operations of $6 million and $11 million,
We appreciate Brookfield Infrastructure's strategy to sale its
lower yielding assets and deploy the funds out of those
transactions to profitable ventures. As the partnership currently
has wide array of investment prospects, it intends to reinvest
the net proceeds from these transactions in the scheduled
In 2012, Brookfield Infrastructure acquired an additional
interest in Chilean toll road and in the largest toll road
operator in Brazil. These transactions will enable the
partnership to reposition its assets, which will in turn,
strengthen its energy, transport and utilities portfolio.
In addition, Brookfield Infrastructure also intends to utilize
the funds to maximize shareholders' wealth with pre-planned
after-tax return on equity of 12% to 15% per annum.
Toronto, Canada-based Brookfield Infrastructure is primarily
engaged in the ownership and operation of premier utilities,
transport and energy, and timber assets in North and South
America, Australasia and Europe. The partnership operates high
quality, long-life assets that generate stable cash flows and
require relatively minimal maintenance capital.
Brookfield Infrastructure currently has a Zacks Rank #4 (Sell).
Other stocks in the industry that are worth considering include
CPFL Energia S.A.
Companhia Paranaense de Energia
) with a Zacks Rank #1 (Strong Buy), and
) with a Zacks Rank #2 (Buy).
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