Triton International Ltd. and Brookfield Infrastructure Partners jointly announced Wednesday that Brookfield has agreed to buy Triton in a cash and stock transaction valuing its common equity at $4.7 billion, giving the company a total enterprise value of about $13.3 billion.
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. The stock portion is subject to a collar. Triton shareholders will be able to elect to receive a mixed cash/stock consideration or all-cash or all-stock.
At closing, BIP’s equity investment is expected to be about $1 billion, inclusive of the BIPC shares.
The deal should close in the fourth quarter if shareholders and regulators approve it.
Skadden advised Brookfield Infrastructure with a team led by M&A partners Eric Otness in Houston and Thomas Greenberg in New York and associates Anya Richter Hodes in New York, Justin Top in Chicago and Brittney Brescia in Houston.
The group included energy and infrastructure projects partner Aryan Moniri and counsel Leah Chacón (Washington, D.C.); executive compensation & benefits partner Page Griffin (Palo Alto and New York); tax partner Moshe Spinowitz (Boston) and associate Jeff Romero (Houston); and antitrust/competition partners Kenneth Schwartz (New York) and Giorgio Motta (Brussels).
Brookfield Infrastructure used BofA Securities and Mizuho Securities USA as financial advisors. Brookfield Infrastructure Corp. tapped Torys as legal counsel and was advised by MUFG.
Sullivan & Cromwell is Triton’s legal advisor with Appleby as Bermuda counsel and Goldman Sachs & Co. is its financial advisor.
Triton International Ltd. claims to be the world’s largest lessor of intermodal freight containers, with a fleet of over 7 million twenty-foot equivalent units. Triton’s global operations include acquisition, leasing, re-leasing and sale of multiple types of intermodal containers and chassis.
It’s a big bet by Canada-based Brookfield on the continued strength of shipping, which has had trouble keeping store shelves full due to supply shortages.
Sam Pollock, CEO of Brookfield Infrastructure, said that Triton is an attractive business with highly contracted and stable cash flows, strong margins and a track record of value creation.
“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,” he said. “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 CEO Brian M. Sondey said in a prepared statement that the transaction provides an excellent outcome for Triton’s stakeholders.
”The sale price provides significant value to our investors and represents a 35 percent premium to yesterday’s closing share price,” he said. “For our long-term shareholders, this transaction crystalizes a total shareholder return of approximately 700 percent since the 2016 merger of Triton and TAL International.”
Sondey added that Brookfield Infrastructure’s resources and long-term investment horizon will support Triton’s franchise, underpin its commitment to providing unrivaled service and support continued investment in its growing business.