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Macquarie Infrastructure (MIC) to Acquire Remainder of International-Matex for $1.025B

By: , dated July 8th, 2014

Shares of Macquarie Infrastructure Company LLC (MIC) were up +3.28 or +5.36 percent to $64.45 per share in pre-market trading early this morning, after the company announced late yesterday two public offerings in order to pay for the remaining interest it does not already own in International-Matex Tank Terminals or IMTT. Macquarie Infrastructure stock closed at $61.17, down -0.43 or -0.70 percent in Monday’s regular trading session. New York City based Macquarie Infrastructure Company LLC is the owner and operator of diverse infrastructure businesses. The company went public in December of 2004 and owns the largest network of fixed base operations in the U.S. The company’s subsidiaries include Atlantic Aviation, Hawai’i Gas, Northwind Aladdin, Thermal Chicago and International-Matex Tank Terminals. New Orleans, Louisiana based International-Matex Tank Terminals was founded in 1939 and owns the largest bulk storage terminal business in the United States. IMTT handles storage and management for a variety of different oils, petroleum and various chemicals. In addition, the company offers rail service, as well as customer waterfront and chemical storage facilities. Macquarie’s separate offerings to fund the acquisition of the other 50 percent of IMTT will have the company sell 10,000,000 LLC interests, or shares, as well as $250 million in convertible senior notes due in July of 2019. The convertible senior notes can only be converted into shares of Macquarie Infrastructure. Also connected to the share offering, Macquarie will grant the underwriters of the deal a 30 day option to buy an additional 1,500,000 shares in connection with the convertible senior note offering. Macquarie will also have a 30-day option to issue up to another $37.5 million in additional convertible notes for the coverage of over allotments. Capital raised through the offerings will be used to purchase the remaining 50 percent of IMTT Macquarie does not already own. Under the terms of the agreement, Macquarie will pay $910.0 million in cash and $115.0 million in stock. Macquarie acquired the initial 50 percent stake in IMTT in May of 2006. James Hooke, Chief Executive Officer of Macquarie Infrastructure in a statement yesterday said, “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.” With the acquisition agreement signed, the Macquarie board has authorized an increase in the company’s quarterly dividend payable in the second quarter. The dividend for the second quarter will be $0.95 per share or $3.80 annually, a +1.3 percent increase over the first quarterly dividend. The dividend will be paid on August 14th, 2014 to shareholder of record on August 11th, 2014. Macquarie Infrastructure stock will open at a new all time high this morning. With the successful acquisition of IMTT along with the dividend hike and other cash disbursals to investors, the stock could continue higher in the near term and possibly in the medium and longer terms as well. Other News About Macquarie Infrastructure Macquarie Acquires Wind Power Assets to Diversify Macquarie set to diversify with recent wind power acquisitions in New Mexico. Macquarie Infrastructure Company Discloses Performance Fee Payable for Second Quarter of 2014 Company announces $5.0 million performance fee payable to its management company. Other Stocks in the News Ex-JPMorgan Trader Said to Contest Loss Report Julien Grout challenges the regulator’s report on the $6.2 billion “London Whale” loss. Wal-Mart embracing smaller stores in growth strategy Company seeks to challenge competitors opening smaller stores.

Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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