Macquarie Infrastructure Company LLC (MIC) has entered into an agreement to acquire the 50% of International-Matex Tank Terminals (IMTT), a firm that owns and operates bulk liquid storage terminal facilities in North America.
Under the terms of the agreement, MIC will purchase the remainder interest from members of the business' founding family for US$910 million in cash and US$115 million in stock. The transaction is expected to be closed this month.
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.
James Hooke, chief executive officer of MIC, stated:
Our acquisition of the remainder of IMTT represents a unique, strategic opportunity for investors, customers and employees of IMTT. 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 acquired its initial 50% stake in IMTT in May 2006.
Since investing in IMTT in early 2006, MIC has seen EBITDA generated by IMTT increase from approximately US$67.0 million in 2005 to US$279.6 million for the trailing twelve month period ended March 31, 2014. The growth in EBITDA has been a function of both pricing power and deployment of capital in growth projects at the business. MIC has participated in the development of approximately $800.0 million worth of growth projects to date and sees opportunity to promote additional growth in the future.
James Hooke added:
We're acquiring a business that we know from our involvement with it over the past eight years and, more importantly, a business with a strong foundation built over many years of stewardship on the part of the Coleman family. We look forward to working with IMTT to accelerate its growth in part through increasing the amount of growth capital deployed into new projects.
Hooke will initially act as the CEO of IMTT in addition to his role as CEO of MIC. Macquarie's IMTT asset director, James May, will become the CFO at IMTT. Both Hooke and May have served on the IMTT board of directors for the past 5 years. May will be assisted by an additional Macquarie secondee who will head up an expanded financial planning and analysis function at IMTT.
John Siragusa, IMTT's current CFO, will assume the role of chief banking officer. Richard Courtney, IMTT's president and chief operating officer will continue in his role. Both Courtney and May will report directly to Hooke.