Americold (COLD) Shares Rise on Agro Merchants Acquisition
Shares of Americold Realty Trust COLD gained 1.8% in the trading session on 31 Dec, indicating investor’s optimism over the company’s completion of the Agro Merchants Group’s acquisition.
Through the transaction, Americold purchased a portfolio of 46 facilities, spanning 236 million refrigerated cubic feet across 10 countries. With the buyout move, the company expanded its global portfolio to 239 facilities, aggregating 1.41 billion refrigerated cubic feet, spanning four continents.
Notably, the company has been tapping the equity and debt market to raise funds for investment in development projects, expansions and growth initiatives.
Specifically, along with the buyout transaction, it issued 14.2 million of its common shares to a fund managed by Oaktree Capital Management, L.P. and Agro’s management. These shares are conditioned to a lockup period until May 17, 2021. Further, Americold closed the institutional private placement of senior unsecured notes worth €750 million on Dec 30, 2020.
Markedly, Americold’s strategically-located high-quality facilities serve as an indispensable component of food infrastructure from “farm to fork", thereby, connecting food producers, processors, distributors and retailers to consumers. The company is likely to witness steady demand for these properties. Particularly, a consistent surge in population and consumption along with a transition in consumer preferences toward healthy, perishable food items will likely lead to a healthy demand for temperature-controlled infrastructure.
Also, the company is anticipated to enjoy a significant competitive edge with its strong infrastructure, aided by superior IT and operating platforms. Moreover, retail customers are navigating the evolving competitive landscape by enhancing and integrating their e-commerce offerings. The e-commerce boom is creating teeming opportunities for Americold.
Shares of this Zacks Rank #3 (Hold) company have appreciated 7% as against the industry’s decline of 3.6% over the past year.
Stocks to Consider
CubeSmart’s CUBE Zacks Consensus Estimate for 2021 funds from operations (FFO) per share has moved up marginally to $1.78 in the past week. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Extra Space Storage Inc’s EXR FFO per share estimates for the current year have been revised marginally upward to $5.43 in the past week. The company carries a Zacks Rank of 2, currently.
City Office REIT, Inc.’s CIO Zacks Consensus Estimate for ongoing-year FFO per share has been unchanged at $1.27 in a months’ time. The company has a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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