Americold Realty Trust announced that it has entered into a definitive agreement to acquire privately held Agro Merchants Group (“Agro”) from an investor group led by funds managed by Oaktree Capital Management, L.P. for a total of $1.740 billion. The acquisition is subject to customary and regulatory closing conditions and closing is expected to occur late in the fourth quarter of 2020 or early in the first quarter of 2021.
Agro is the fourth largest temperature-controlled warehouse company globally, the third largest in Europe, and the fourth largest in the United States, and serves over 2,900 customers across a diverse spectrum of commodities. Agro’s portfolio consists of 46 facilities, totaling 236 million refrigerated cubic feet, located in 10 countries.
“We are very excited to welcome the Agro team to the Americold family as we expand the scale and enhance the geographic reach of the Americold network. 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. In addition, we are excited about the external development and M&A opportunities that this acquisition provides,” stated Fred Boehler, President and Chief Executive Officer of Americold Realty Trust.
Summary of Strategic Benefits
Americold expects this transaction to benefit the Company in several key areas:
- Expands Americold’s strategic footprint into Europe, with established access to the European food logistics network;
- Positions Americold to more effectively serve multinational customers on a global scale, adding key European and eastern U.S. port-advantaged locations, and strengthening the Company’s existing market position in Australia and South America;
- Diversifies the Company’s customer base and expands our fresh produce offering and market position, while increasing wallet share with key customers;
- Expected to be modestly accretive in 2021 with significant long term benefits and value creation through the operational integration of an aggregated portfolio by implementing the Americold Operating System (AOS), commercialization practices, and synergy realization;
- Embedded M&A, expansion and development provide opportunities for future growth, and;
- Alignments of interest as Oaktree and Agro management are taking 14.2 million shares in COLD common stock subject to lockup until May 17, 2021.
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 $1.740 billion, consisting of $554.3 million 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 by us 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.