Macquarie Infrastructure Company LLC
) announced the pricing of an underwritten public offering of 10
million shares and also of $305 million worth of five-year
convertible senior notes. The infrastructure service provider will
use the proceeds to fund the purchase of the remaining stake in New
Orleans-based International-Matex Tank Terminals.
Equity & Debt Issues
The company priced an underwritten public offering of 10 million
shares at $66.50 per share. It also granted the underwriters a
30-day option to purchase up to an additional 1.5 million shares.
The offering, subject to customary closing conditions, is expected
to close on Jul 15, 2014.
The $305 million worth of convertible senior notes were priced at a
conversion premium of 27.5% over the public offering price of
$66.50 each share. Due Jul 2019, the convertible senior notes will
yield 2.875%, and will be converted into shares of Macquarie.
Initially valued at $250 million, the offering size was increased
to $305 million.
Additionally, the underwriters have been granted a 30-day option to
buy up to an additional $45 million of convertible senior notes.
JPMorgan Chase & Co.
), Macquarie Capital, RBC Capital, the investment banking arm of
Regal Beloit Corporation
), SunTrust Robinson Humphrey and Wells Fargo Securities are acting
as joint book-running managers of the offerings.
Macquarie has decided to acquire the remaining 50% stake, and
consequently full ownership, in International-Matex Tank Terminals
for $910 million in cash and $115 million in newly-issued stock. It
already owns 50% stake in the company since May 2006.
The cash part of the deal will be funded using proceeds from the
debt and share issuance, as well as cash on hand. Any leftover
proceeds from the offerings will be utilized for general corporate
purposes. The acquisition is expected to conclude later this month,
subject to mandatory closing conditions and regulatory approvals.
The acquisition of International-Matex, operator of 12 bulk liquid
storage terminal facilities in North America, is part of
Macquarie's strategy to ensure steady revenue streams in order to
counteract the cyclical nature of their equity trading and advisory
operations. The buyout is also expected to strengthen the company's
foray into the stable commodities business.
With full ownership, Macquarie will be better positioned to
capitalize on the acquiree's robust growth momentum, further
enhancing its footprint in North America. Moreover, management
expects the deal to drive operational improvement and dividend
The deal is the latest in a series of terminals business
acquisitions for Macquarie. The group acquired 45% stake in
Singapore's Helios Terminal Corp. from Oiltanking GmbH last year.
It also bought ANZ Terminals, which provides liquids storage
facilities, for $492 million, according to a Jun 30 report by the
Australian Financial Review.
Macquarie presently holds a Zacks Rank #3 (Hold).
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