Triton International and Brookfield Infrastructure Partners, through its subsidiary Brookfield Infrastructure Corporation have jointly announced a definitive agreement for Triton to be acquired in a cash and stock transaction valuing the Company'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," commented Brian M. Sondey, Chief Executive Officer of Triton.
"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," said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure.
"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 the world's largest owner and lessor of intermodal containers and is a critical provider of transportation logistics infrastructure supporting global supply chains. The Company has built an irreplaceable asset base, delivers high levels of utilization and maintains strong customer relationships. Triton is led by a proven management team and Brookfield Infrastructure looks forward to partnering with them to enhance the business under private ownership.
Brookfield Infrastructure intends to maintain Triton's existing investment grade capital structure, uphold the highest operating and customer service standards for the benefit of Triton's customers and stakeholders, and help grow the business, aided by Brookfield Infrastructure's substantial access to long-term private capital.
The total consideration of $85.00 per Triton common share ("Triton Share") will consist of $68.50 in cash and $16.50 in BIPC class A exchangeable shares ("BIPC Shares") (NYSE: BIPC, TSX: BIPC). At closing, BIP's 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 ten-day VWAP of BIPC Shares (measured two days prior to closing) (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 above, 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.
Approvals and Timing
The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including approval by Triton's shareholders and receipt of required regulatory approvals. The transaction has been unanimously approved and recommended by the Board of Directors of Triton. The transaction 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 the Triton common shares. Upon the closing of the transaction, Triton's common shares will be delisted from the New York Stock Exchange. Triton's Series A-E cumulative redeemable perpetual preference shares will remain outstanding.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Triton and Sullivan & Cromwell LLP is serving as Triton's legal advisor, with Appleby as Bermuda counsel.
Brookfield Infrastructure engaged BofA Securities and Mizuho Securities USA LLC as joint financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor. Brookfield Infrastructure Corporation engaged Torys LLP to serve as legal counsel and was advised by MUFG.
About Triton International Limited
Triton International Limited is the world's largest lessor of intermodal freight containers. With a container fleet of over 7 million twenty-foot equivalent units, Triton's global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.
About Brookfield Infrastructure
Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream and data sectors across North and South America, Asia Pacific and Europe. Brookfield Infrastructure is focused on assets that generate stable cash flows and require minimal maintenance capital expenditures. Investors can access its portfolio either through Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a Bermuda-based limited partnership, or Brookfield Infrastructure Corporation (NYSE, TSX: BIPC), a Canadian corporation.
Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Corporation, a global alternative asset manager with approximately $800 billion of assets under management.