Macquarie Infrastructure Company LLC (the “Company” or “MIC”) (NYSE: MIC) announced that it has entered into an agreement to acquire the 50% of International-Matex Tank Terminals, or IMTT, it does not currently own. Under the terms of the agreement, MIC will purchase the remainder interest from members of the business’ founding family for $910.0 million in cash and $115.0 million in stock.
MIC acquired its initial 50% stake in IMTT in May of 2006.
The announced terms imply an enterprise value for IMTT of 10.7 times the business’ trailing twelve month EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) to March 31, 2014 of $279.6 million.
“Our acquisition of the remainder of IMTT represents a unique, strategic opportunity for investors, customers and employees of IMTT,” said James Hooke, chief executive officer of MIC. “We believe the acquisition will deliver dividend growth for shareholders of MIC and to further enhance our ability to drive operational improvement and growth investments at IMTT. In addition, we expect the acquisition will fortify MIC’s stable, largely contracted revenue based business model.”
MIC expects the acquisition to be accretive to its Free Cash Flow per share in 2014. The Company now expects its underlying 2014 Free Cash Flow – excluding transaction-related expenses - to be approximately $4.55 per share, or 11.2% higher than in 2013. The accretion reflects the increased contribution from IMTT in the future, partially offset by the dilution associated with the new shares to be issued in connection with the acquisition and the crystallization of federal income taxes payable by IMTT for the first and second quarters of 2014. As the Company does not expect the transaction to close before late July, the accretion represents only a partial year benefit of 100% ownership of IMTT.
In connection with the announcement, MIC has also introduced guidance for underlying Free Cash Flow in 2015 of $5.10 per share. If both the 2014 and 2015 Free Cash Flow figures are achieved, the year on year growth in 2015 will be approximately 12.1%. MIC has grown Free Cash Flow per share by 12.3%, on average, each year since 2007.