In a concerted effort to augment the organic growth of its
business, infrastructure service provider
Macquarie Infrastructure Company LLC
) recently completed the divestiture of its district energy unit
and invested the proceeds in its existing businesses. However, no
visible effects were seen on the stock as share prices traded
relatively flat at $71.68 on Friday, largely due to the fact that
the long-term effect of the reinvestments is yet to be recognized.
Macquarie sold its subsidiary Thermal Chicago Corporation to an
entity managed by utility firm Brookfield Infrastructure Partners
) for $270 million. Thermal Chicago provides district cooling
services to business owners and managers in downtown Chicago by
offering chilled water for air-conditioning large condominium,
commercial, and industrial facilities. These include condominium
and apartment buildings, theaters, hotels, financial institutions,
data centers, retail centers, schools, as well as Class A, B, and C
office buildings. Thermal Chicago also owns and operates
stand-alone heating and cooling facilities at a major metropolitan
airport and at a major Las Vegas casino complex.
Macquarie had a 50.1% ownership stake in Thermal Chicago with the
remainder being held by a unit of the John Hancock Life Insurance
Company (U.S.A.) - an operating unit of Manulife Financial
). Despite having an internal rate of return of over 20% from
Thermal Chicago, Macquarie decided to divest it to concentrate on
its existing high-margin businesses. The company expects to
redeploy about $60 million of the net proceeds from the asset sale
as reinvestments in business.
Macquarie owns and operates a diversified group of infrastructure
businesses in the U.S., including a gas processing and distribution
business, Hawaii Gas, several entities comprising a Contracted
Power and Energy segment, and an interest in a bulk liquid storage
terminal business called International-Matex Tank Terminals. The
company also owns and operates an airport services business titled
Macquarie presently has a Zacks Rank #2 (Buy). Another stock in the
industry worth mentioning includes ITT Corporation (
), which has the same rank as Macquarie.
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