Macquarie Infrastructure Sells Atlantic Aviation to KKR for $4.475B

Macquarie Infrastructure signed a definitive agreement to sell its Atlantic Aviation business to KKR for $4.475 billion in cash and assumed debt and reorganization obligations. Atlantic Aviation operates a network of fixed base operations (FBOs) in the U.S. and provides services to the private aviation sector. The purchase price implies a multiple of Atlantic Aviation’s 2019 EBITDA of 16.2 times.

Macquarie Infrastructure expects to receive $3.525 billion at closing following the reorganization of the company into a limited liability company, Macquarie Infrastructure Holdings (MIH). The reorganization was approved by Macquarie Infrastructure shareholders on May 6 and is expected to be completed shortly before the closing of the Atlantic Aviation sale.

The Atlantic Aviation sale is expected to result in cash proceeds of approximately $3.298 billion, which will be available for distribution to unitholders after a disposition payment by MIH to Macquarie Infrastructure’s external manager of approximately $227 million. The disposition payment was calculated in accordance with the disposition agreement entered into by and between Macquarie Infrastructure and the company’s external manager on October 30, 2019. The MIH board of directors is expected to authorize a cash distribution of approximately $37.35 per unit following the closing of the transaction.

“We are proud of the robust growth Atlantic Aviation has achieved under our ownership, which resulted in strong interest from prospective buyers during the sale process,” Christopher Frost, CEO of Macquarie Infrastructure, said. “We are pleased with the outcome of the sale process and the unlocking of additional value for MIC shareholders. In addition to the timely closing of a sale of Atlantic Aviation, our focus remains on successfully concluding the sale process for our MIC Hawaii business.”

“Atlantic Aviation has an outstanding reputation as a leading operator of critical aviation infrastructure across the U.S.,” Dash Lane, a partner at KKR, said. “With our focus on providing long-term capital to support the growth of high-quality and resilient businesses, we are excited to invest alongside Atlantic’s experienced team and strong existing platform, which we believe is well-positioned to capitalize on multiple avenues of future growth.”

The sale of Atlantic Aviation is expected to close in Q4/21, subject to customary regulatory approvals and approval from Macquarie Infrastructure shareholders. Macquarie Infrastructure expects to seek approval of the Atlantic Aviation sale at a special meeting of shareholders, which will be conducted as soon as practically possible following clearance of the related proxy statement by the Securities and Exchange Commission.

KKR is making its investment in Atlantic Aviation primarily through its global infrastructure investors and core investments strategies.

Lazard and Evercore acted as financial advisors and White & Case acted as legal advisor to Macquarie Infrastructure in connection with the sale of Atlantic Aviation. Jefferies served as financial advisor and Kirkland & Ellis acted as legal advisor to KKR.

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