Temperature-controlled warehouse operator Americold Realty Trust (NYSE: COLD) announced that it has entered into an agreement to acquire Canadian-based cold storage facility operator Nova Cold Logistics for C$337 million from asset management firm Brookfield Business Partners (NYSE: BBU). (A Canadian dollar equals US$0.75.) The deal is expected to close in the first quarter of 2020.
The Atlanta-based real estate investment trust (REIT) also announced that it closed on two other deals. Americold acquired two cold storage facilities in Maryland and Pennsylvania from MHW Group, Inc. and exercised an option to purchase the underlying land as well for $54 million.
"We are excited to expand our infrastructure and presence in Canada and Mid-Atlantic U.S. with these highly strategic locations and modern facilities that offer compelling growth opportunities," said Americold's president and CEO Fred Boehler.
The acquisition of Nova Cold provides Americold three new locations – Toronto, Calgary and Halifax – with 23.5 million cubic feet and 81,000 pallet positions of capacity. These facilities also have additional land allowing for future expansion. The acquisition will be funded with cash, debt from the company's revolving credit facility and equity. Management said that the acquisition will be accretive in the first year with a net operating income (NOI) yield, typically rents minus expenses expressed as a percentage of the property's value, of approximately 6.1%.
The MHW properties provide Americold with two rail-served Mid-Atlantic facilities, in Chambersburg, Pennsylvania and Perryville, Maryland, with a combined total of 19 million cubic feet and 86,000 pallet positions. The year one NOI yield is expected to be 7.8%. The deal will be funded with cash.
"These accretive acquisitions enhance the Company's position as a leading global owner and operator of temperature-controlled infrastructure while expanding relationships with existing high quality customers and providing access to new regional and local customers," said Boehler.
Americold has been on the acquisition trail in 2019, acquiring Cloverleaf Cold Storage for $1.25 billion in the second quarter of 2019. The Sioux City, Iowa-based operation has 22 facilities with 132 million cubic feet of temperature-controlled warehouse space in the central and southeast U.S.
The company also acquired Lanier Cold Storage in the second quarter for $82 million. The Georgia-based outfit's two facilities added 14 million cubic feet and 51,000 pallet positions to Americold's portfolio.
Boehler concluded, "Additional opportunities to enhance returns over the next two to three years by implementing our best-in-class commercial business practices and the Americold Operating System make them even more attractive."
Americold Realty Trust's real estate portfolio includes more than 175 temperature-controlled facilities with more than one billion refrigerated cubic feet of storage in the United States, Australia, New Zealand, Canada and Argentina.
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