Macquarie Infrastructure Company (the “Company” or “MIC”) (NYSE: MIC) announced that its Atlantic Aviation business has entered into an agreement to acquire certain of the assets of Galaxy Aviation, including substantially all of the assets of five fixed base operations (FBOs) and one new hangar that is currently under construction at one of the five airports at which the FBOs operate, for $195.0 million . The Company said that it expects the acquisition to be immediately accretive to proportionately combined free cash flow. MIC expects to fund the acquisition using a combination of cash on hand, a draw on a credit facility of its Atlantic Aviation subsidiary and proceeds from an equity offering launched this morning. The transaction is expected to close in the first quarter of 2014, subject to the receipt of consents from the relevant airport authorities and satisfaction of other closing conditions typically associated with a transaction of this size and type. “The acquisition of the Galaxy Aviation FBOs adds high-quality facilities in the strategically important Florida market,” said James Hooke, Chief Executive Officer of Macquarie Infrastructure Company. “In addition to creating an immediate, substantial presence for Atlantic Aviation in the Florida marketplace, it is expected to provide MIC with an increase in proportionately combined free cash flow.” The acquired FBOs are expected to generate annualized adjusted EBITDA in 2014 of approximately $17.83 million including earnings from a hangar currently under construction at West Palm Beach airport. The 75,000 square foot hangar is forecast to be in service late in the first quarter of 2014 and will immediately be occupied by customers who have already signed contracts for the space. Four of the five facilities being acquired are located in Florida. Florida collectively accounted for approximately 11.8% of general aviation jet traffic at the busiest 250 general aviation airports in the US in 2012, according to data published by the Federal Aviation Administration. The fifth facility is located near Steamboat Springs, Colorado and complements Atlantic Aviation’s existing operations at Aspen and Rifle, Colorado.
The current Atlantic Aviation portfolio of 63 FBOs, the largest in the US based on number of locations, does not include any facilities in Florida.“In addition to attractive, up-to-date facilities, the approximately 25-year average remaining lease life of the acquired FBOs will increase the combined remaining lease life at Atlantic Aviation to more than 20 years,” noted Hooke. “The long average lease life provides us with good visibility into the cash generating capacity of the business.” Through the first three quarters of 2013, Atlantic Aviation’s EBITDA had grown year on year by 9.9%. On December 6, 2013, MIC CEO James Hooke noted, "The improvement in performance and growth momentum at Atlantic Aviation in evidence through the September quarter of this year has continued in the fourth quarter." About Macquarie Infrastructure Company Macquarie Infrastructure Company owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a gas processing and distribution business, Hawaii Gas, a controlling interest in a District Energy business in Chicago, and a 50% interest in a bulk liquid storage terminal business, International-Matex Tank Terminals. MIC also owns and operates an airport services business, Atlantic Aviation and five solar power generation facilities, collectively MIC Solar. The Company is managed by a wholly-owned subsidiary of the Macquarie Group. For additional information, please visit the Macquarie Infrastructure Company website at www.macquarie.com/mic. MIC-G MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.