IFM Investors to buy US pipeline operator Buckeye Partners for $6.5bn

IFM Investors has agreed to acquire listed US pipeline operator Buckeye Partners for $6.5bn (€5.79bn), giving the Australian-based global infrastructure investor a wider footprint in the US market.

The all-cash transaction, announced Friday, is valued at $10.3bn enterprise value and $6.5bn equity value.

IFM is paying $41.50 per unit for the US company, representing a 27.5% premium on Buckeye’s closing unit price on 9 May.

Following the acquisition, Buckeye will be privatised.

Buckeye owns and operates one of the largest diversified networks of integrated midstream assets in the US, including 6,000 miles of pipeline servicing more than 100 delivery locations and 115 liquid petroleum products terminals with an aggregate tank capacity of more than 118m barrels.

Its network of marine terminals is located primarily in the East Coast and Gulf Coast regions of the US, as well as the Caribbean.

Julio Garcia, IFM’s head of infrastructure, North America, said: “The acquisition is aligned with IFM’s focus on investing in high quality, essential infrastructure assets that underpin the economies in which they operate.”

Clark Smith, Buckeye’s chairman, president and chief executive, told analysts during a call to announce the transaction and the firm’s first-quarter results that Buckeye had announced a strategic review of its options last year.

There was a trend to more stability and self-funding in the public market, he said, and this had weakened company multiples, resulting in an undervaluation of Blackeye’s assets.

“On the other hand, there is strong interest in private and infrastructure funds, resulting in more attractive multiples for Blackeye’s assets.”

Related images

  • LPG Storage System at Buckeye Texas Processing Facility

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2540

    Asset class: All/Large Cap Equities.
    Asset region: UK.
    Size: The fund will be added to our guided fund range.
    Closing date: 2019-05-27.

  • QN-2541

    Asset class: Small/Mid-Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

  • QN-2542

    Asset class: All/Large Cap Equities.
    Asset region: Switzerland.
    Size: CHF 130m.
    Closing date: 2019-06-04.

Begin Your Search Now