Brookfield Infrastructure Partners, through its Brookfield Infrastructure Corporation subsidiary and institutional partners, entered a definitive agreement to acquire Triton International in a cash and stock transaction valuing Triton’s common equity at approximately $4.7 billion and reflecting a total enterprise value of approximately $13.3 billion.
“We believe this transaction provides an excellent outcome for all of Triton’s stakeholders,” Brian M. Sondey, CEO of Triton, said. “The sale price provides significant value to our investors and represents a 35% premium to yesterday’s closing share price. For our long-term shareholders, this transaction crystalizes a total shareholder return of approximately 700% since the 2016 merger of Triton and TAL International. For our customers and employees, Brookfield Infrastructure’s significant resources and long-term investment horizon will support Triton’s franchise, underpin our commitment to providing unrivaled service and support continued investment in our growing business.”
“Triton is an attractive business with highly contracted and stable cash flows, strong margins and a track record of value creation,” Sam Pollock, CEO of Brookfield Infrastructure, said. “This transaction provides Brookfield Infrastructure with a high going-in cash yield, strong downside protection and a platform for growth in the transportation and logistics sector. The transaction consideration also provides the opportunity for Triton shareholders to benefit from owning a globally diversified portfolio of infrastructure assets within a platform that has a proven history of generating long-term value for its shareholders.”
Triton is an owner and lessor of intermodal containers and a provider of transportation logistics infrastructure supporting global supply chains. Brookfield Infrastructure intends to maintain Triton’s existing investment grade capital structure and grow the business via its access to long-term private capital.
The total consideration of $85 per Triton common share will consist of $68.50 in cash and $16.50 in BIPC Class A exchangeable shares. At closing, Brookfield Infrastructure Partners’ equity investment is expected to be approximately $1 billion, inclusive of the BIPC shares.
The stock portion of the consideration is subject to a collar, ensuring Triton shareholders receive the number of BIPC shares equal to $16.50 in value for every Triton share if the 10-day VWAP of BIPC shares (measured two days prior to closing and labeled the BIPC final stock price) is between $42.36 and $49.23. Triton shareholders will receive 0.390 BIPC shares for each Triton share if the BIPC final stock price is below $42.36, and 0.335 BIPC shares for each Triton share if the BIPC final stock price is above $49.23. With the collar, between 18.4 and 21.3 million BIPC shares will be issued to Triton shareholders.
Triton shareholders will be able to elect to receive the mixed cash/stock consideration described in this article, or all-cash or all-stock consideration, subject to proration to the extent cash or stock is oversubscribed. Regardless of the mix elected, the value per share will be equalized ahead of closing, such that the value of each election choice will be substantially the same.
The transaction is expected to close in Q4/23, subject to customary closing conditions, including approval by Triton’s shareholders and receipt of required regulatory approvals. The board of directors of Triton unanimously approved and recommended the transaction, which has also received all required approvals from Brookfield Infrastructure, is not subject to a financing condition and is not subject to approval from BIPC shareholders.
Prior to closing, Triton intends to maintain its current quarterly dividend on its common shares. Upon the closing of the transaction, Triton’s common shares will be delisted from the New York Stock Exchange; however, Triton’s Series A-E cumulative redeemable perpetual preference shares will remain outstanding.
Goldman Sachs is serving as exclusive financial advisor to Triton and Sullivan & Cromwell is serving as Triton’s legal advisor, with Appleby as Bermuda counsel.
Brookfield Infrastructure engaged BofA Securities and Mizuho Securities as joint financial advisors and Skadden, Arps, Slate, Meagher & Flom as legal advisor. Brookfield Infrastructure Corporation engaged Torys to serve as legal counsel and was advised by MUFG.
