Macquarie Infrastructure Corporation Announces Agreement to Sell MIC Hawaii; Completes the search for strategic alternatives

NEW YORK–(BUSINESS WIRE) – Macquarie Infrastructure Corporation (NYSE: MIC) (“MIC” or “the Company”) today announced the culmination of its alternative strategic process by signing a merger agreement with a subsidiary of Argo Infrastructure Partners, LP (“Argo”). Upon closure of the company’s MIC Hawaii stores, Argo will become a wholly owned subsidiary of Argo for an expected price of $ 3.83 per unit. The transaction is expected to close in the first half of 2022.

MIC Hawaii is primarily comprised of a combined regulated gas supplier and unregulated propane distributor, as well as several smaller companies working together to reduce costs and improve the reliability and sustainability of energy in Hawaii.

In October 2019, MIC announced that it was looking for strategic alternatives, including selling the entire company or individual operating divisions. MIC started the sales processes at the beginning of 2020.

In December 2020, MIC completed the sale of its bulk storage terminal business IMTT for $ 2.67 billion. The proceeds were used to clear the holding company’s debt, with the remainder being distributed to shareholders as a special dividend of $ 11.00 per share in cash in January 2021.

In June 2021, MIC announced that it would sell its aviation services business, Atlantic Aviation, for $ 4.475 billion. The transaction is expected to close in the fourth quarter of 2021 after the planned reorganization of the company is complete and will result in a cash distribution of approximately $ 37.35 per unit.

“Since 2018, our strategy has focused on improving the infrastructure features of our businesses, improving their resilience, and unlocking additional value for our shareholders,” said Christopher Frost, chief executive officer of MIC. “While COVID-19 has extended the timeframe for this effort to be completed, we are now handing our businesses over to private owners who recognize their improved resilience and growth potential. Subject to the successful completion of our two agreed transactions, we have met our commitments and will distribute net proceeds of $ 52.18 per share to shareholders, a 35% premium on our share price, before we begin looking for strategic alternatives. ”

Merger agreement

Under the terms of the Merger Agreement, upon completion, Argo will pay the Merger Consideration to the Shareholders and fund the transaction costs as well as a back-up payment to MIC’s outside manager of approximately $ 82 million if the merger is on or before July 1, 2022 or $ 57 million if the merger completes after that date. The disposition payment was calculated in accordance with the disposition agreement between MIC and the company’s external manager dated October 30, 2019.

The terms of the merger equate to an enterprise value for MIC Hawaii of $ 514 million, including debt assumed and transaction costs, resulting in a 2021 earnings before interest, depreciation and amortization (EBITDA) multiple of 12.9 times the company’s 2021 forecast. The multiple reflects the steady improvement in visitor numbers to Hawaii, a key driver of business performance, even though visitor numbers have not yet recovered to pre-COVID-19 levels.

Shareholders are expected to receive $ 3.83 per Share less an additional payment to the Company’s external manager if the merger is completed on or before July 1, 2022. If the merger is completed after that date, shareholders will receive consideration of $ 4.11 per share.

The merger is expected to close in the first half of 2022, subject to customary approvals, including the Hawaii Public Utilities Commission and MIC shareholders, as well as the prior completion of the previously announced sale of MIC’s Atlantic Aviation business. MIC intends to obtain shareholder approval for both the merger and sale of Atlantic Aviation at a special meeting of shareholders in 2021. Upon graduation, MIC will no longer be a publicly traded company.

Lazard and Evercore acted as financial advisor and White & Case LLP acted as legal advisor to MIC.

About MIC

MIC owns and operates companies that provide basic services to customers in the United States. Its businesses consist of an airport services business, Atlantic Aviation, and entities that include a power services, manufacturing and sales segment, MIC Hawaii. For more information, please visit the MIC website at www.macquarie.com/mic.

MIC is not a licensed depository institution under the Banking Act 1959 (Commonwealth of Australia). MIC’s obligations do not constitute deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL makes no guarantees or other representations with respect to MIC’s obligations.

Important information for investors and shareholders

In connection with the Proposed Transaction, Macquarie Infrastructure Corporation (the “Company”) intends to file a power of attorney with the Securities and Exchange Commission (“SEC”), the final version of which will be sent to shareholders of the Company. INVESTORS AND SECURITY OWNERS OF THE COMPANY ARE STRONGLY RECOMMENDED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS ADDED OR SUBMITTED TO THE SEC CAREFULLY AND IN WHOLE, AS IT CONTAINS IMPORTANT INFORMATION. Investors and securityholders can obtain free copies of the proxy and other documents filed by the Company with the SEC through the SEC operated website at https://www.sec.gov. Copies of the company’s filings with the SEC are also available free of charge on the company’s website at www.macquarie.com/mic or by writing to us at 125 West 55th Street, New York, New York 10019, USA of America , Attention: Investor Relations.

Certain information about attendees

The Company and its directors and officers may be considered participants in the solicitation of proxies in connection with the Merger. Information about the company’s directors and officers is in its Annual Report on Form 10-K for the 31st Annual General Meeting 2021, filed with the SEC on March 29, 2021. Additional information regarding the Company’s proxy attendees and a description of their direct and indirect interests, by holdings or otherwise, is included in the Power of Attorney and other relevant materials required to be filed with the SEC in relation to the Transaction as they become available.

Disclaimer for forward-looking statements

This release contains forward-looking statements. The company may in some cases use words such as “project”, “believe”, “anticipate”, “plan”, “expect”, “estimate”, “intend”, “should”, “could”, “potentially” or “May” or other words that convey uncertainty about future events or results used to identify these forward-looking statements. Such statements include, but are not limited to, those about the Company’s expected financial performance and strategic and operational plans, statements about the sale of the Company’s operations (including the proposed reorganization of the Company), the ability to complete such sales, and their anticipated uses the resulting revenues, statements about the expected specific and general effects of the COVID-19 pandemic as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Forward-looking statements in this release are subject to a number of risks and uncertainties, some of which are beyond the control of the company, including but not limited to: changes in general economic or business conditions; the ongoing effects of the COVID-19 pandemic; the company’s ability to complete the sale of the company or its operations on favorable terms; the company’s ability to service debt, meet terms and conditions, and refinance; its ability to retain or replace qualified employees; in the absence of a sale or sale of its businesses, its ability to complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and execute its strategy; the regulatory environment; demographic developments; the political environment; the cost of business, tourism, construction and transportation; Air travel; Environmental costs and risks; Fuel and gas and other raw material costs; the company’s ability to reclaim cost increases from customers; Cybersecurity risks; Work breaks or other work interruptions; Risks associated with acquisitions or disposals; Litigation risks; Reliance on sole or limited source suppliers, risks or conflicts of interest associated with the company’s relationship with the Macquarie Group; and changes in US federal tax law. These and other risks and uncertainties are described under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and in its other reports from time to time with the SEC described.

The company’s actual results, performance, prospects, or opportunities could differ materially from those expressed or implied in any forward-looking statements. Additional risks of which the company is currently not aware could also lead to deviations in the actual results. Given these risks, uncertainties, and assumptions, you should not place undue reliance on forward-looking statements. The forward-looking events discussed in this release cannot occur. These forward-looking statements speak as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or for any other reason, except as required by law.