Americold Realty Trust (NYSE: COLD) the world’s largest publicly traded REIT focused on the acquisition, development and operation of temperature-controlled warehouses, announced Tuesday that it has agreed to buy the world’s fourth largest temperature-controlled warehouse company, Agro Merchants Group.
Agro was previously privately held by a group of investors led by Oaktree Capital Management. The agreed sale price was $1.74bn.
Agro currently serves over 2,900 customers across a diverse spectrum of commodities and runs a portfolio of 46 facilities, totalling 236 million refrigerated cubic feet, located in 10 countries.
Fred Boehler, President and Chief Executive Officer of Americold Realty Trust said of the deal, “The acquisition of Agro represents a unique opportunity to acquire an institutional-quality global portfolio that facilitates our strategic entry into Europe and adds complementary locations in the US, South America and Australia, where Americold is already established. This strategic transaction provides exciting long-term growth opportunities through our ability to implement the Americold Operating System and commercial business rules across the Agro platform. In addition, we are excited about the external development and M&A opportunities that this acquisition provides,”
Carlos Rodriguez, Chief Executive Officer of Agro Merchants Group commented, “Americold has one of the strongest networks in the world with leading operational capabilities. We are confident that by joining Americold, we will accelerate our growth and by combining our complementary networks, we will be able to provide a more comprehensive range of solutions to customers around the world.”
The previous owners will maintain a stake in the combined business, with Oaktree and Agro management taking 14.2 million shares in COLD common stock subject to lockup until May 17, 2021.
Zach Serebrenik, Managing Director at Oaktree commented, “We have always admired Americold as leaders in the cold storage sector, and we believe that the combination of Agro’s portfolio with Americold’s operating system and global platform creates an extremely compelling growth story. For this reason, we will retain a meaningful equity position and look forward to participating in what we expect to be significant shareholder value creation over the long term.”
Upon closing, Americold’s portfolio, including owned and managed sites, will consist of 229 facilities totaling approximately 1.35 billion refrigerated cubic feet, with a global network spanning four continents.
The acquisition is valued at approximately $1.74bn, consisting of $554.3m in Americold common shares, which will be subject to a lockup period until May 17, 2021, $519 million in cash, repayment of approximately $560 million of in-place Agro debt and assumption of approximately $110 million of in-place Agro capital leases and sale leaseback financing obligations, off-set by any cash on hand net of debt-like items and working capital adjustments.
Americold were advised on the deal by Citigroup, plus legal advice from King & Spalding LLP and Freshfields Bruckhaus Deringer.
Moelis & Company acted as exclusive financial advisor to Agro with Latham & Watkins LLP looking after the legal side.
The acquisition is subject to customary and regulatory closing conditions and is expected to complete late in the fourth quarter of 2020 or early in the first quarter of 2021.