Americold Realty Trust (NYSE: COLD) has entered into a definitive agreement to acquire Nova Cold Logistics from Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN) and its institutional partners for CDN $337 million.
The closing of the acquisition is subject to customary closing conditions and is expected to occur in the first quarter of 2020.
Nova Cold Logistics. formally known as Brookfield Cold Storage, owns portfolio consists of three locations totaling 23.5 million cubic feet with approximately 81,000 pallet positions, and additional acreage for future expansions, located in the gateway cities of Toronto, Calgary, and Halifax.
In June 2013, Brookfield Capital Partners III, the flagship private equity fund of Brookfield Asset Management Inc.(TSX: BAM.A; NYSE: BAM; EURONEXT: BAMA) acquired Canadian logistics operations of Millard Refrigerated Services to form Brookfield Cold Storage.
Brookfield Business Partners owns 100% of voting interest and 25% of economic interest in Nova Cold.
Atlanta, Georgia based Americold is the world’s largest publicly traded REIT focused on the ownership, operation and development of temperature controlled warehouses.
photo credit: Nova Cold
Americold Realty Trust Signs Definitive Agreement to Acquire Canadian Temperature-Controlled Operator – Nova Cold Logistics – and Acquires Two Mid-Atlantic Facilities
– Increases Presence in Three Gateway Canadian Cities –
– Strengthens Presence in Mid-Atlantic –
– Both Transactions Expected to be Accretive to Cashflow and Earnings in First Year –
November 21, 2019 07:00 AM Eastern Standard Time
ATLANTA–(BUSINESS WIRE)–Americold Realty Trust (NYSE:COLD) (the “Company” or “Americold”), the world’s largest publicly traded REIT focused on the ownership, operation and development of temperature-controlled warehouses, announced today that the Company has entered into a definitive agreement to acquire Nova Cold Logistics (“Nova Cold”), based in Canada, for CAD $337 million from Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN), together with its institutional partners (collectively “Brookfield”). The closing of the acquisition is subject to customary closing conditions and is expected to occur in the first quarter of 2020.
Separately, the Company announced today that is has completed the acquisition of two cold storage facilities owned by MHW Group Inc. (“MHW”), one in Maryland and one in Pennsylvania, and exercised an option to purchase the underlying land, for $54 million.
“We are excited to expand our infrastructure and presence in Canada and Mid-Atlantic U.S. with these highly strategic locations and modern facilities that offer compelling growth opportunities. We look forward to welcoming all the new Associates to our team,” stated Fred Boehler, President and Chief Executive Officer of Americold. “These accretive acquisitions enhance the Company’s position as a leading global owner and operator of temperature-controlled infrastructure while expanding relationships with existing high quality customers and providing access to new regional and local customers.”
Mr. Boehler continued, “Both of these acquisitions are immediately accretive on a leverage neutral basis. Additional opportunities to enhance returns over the next two to three years by implementing our best-in-class commercial business practices and the Americold Operating System make them even more attractive.”
Nova Cold Acquisition
The Nova Cold portfolio consists of three locations totaling 23.5 million cubic feet with approximately 81,000 pallet positions, and additional acreage for future expansions, located in the gateway cities of Toronto, Calgary, and Halifax. This acquisition expands Americold’s position in Canada, a growing market with fragmented ownership of cold storage facilities, where the Company already has a presence through its third-party management business. Americold’s current customer base has significant overlap with Nova Cold’s.
This transaction is expected to be executed at a CAD year one NOI yield of approximately 6.1% and is intended to be funded with a combination of cash on the balance sheet, the Company’s corporate revolver, and proceeds from the Company’s second quarter 2019 equity forward. Additionally, the Company intends to implement cross-currency swaps to reduce exposure to foreign exchange rate fluctuations.
The MHW portfolio consists of two facilities totaling 19.0 million cubic feet and approximately 86,000 pallet positions located in Chambersburg, PA and Perryville, MD. Both facilities are rail-served sites and strengthen Americold’s presence in the Mid-Atlantic region. This transaction is being executed at a year one NOI yield of approximately 7.8% and is being funded with cash on the balance sheet.
About Americold Realty Trust
Americold is the world’s largest publicly traded REIT focused on the ownership, operation and development of temperature controlled warehouses. Based in Atlanta, Georgia, Americold owns and operates 176 temperature-controlled warehouses, with over 1 billion refrigerated cubic feet of storage, in the United States, Australia, New Zealand, Canada, and Argentina, as of September 30th, 2019. Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors and retailers to consumers.
Americold Realty Trust