ATLANTA AND SCHIPHOL, NETHERLANDS — Americold Realty Trust (NYSE: COLD) has agreed to acquire Agro Merchants Group, a privately held cold storage warehouse owner based in The Netherlands, for $1.74 billion. Atlanta-based Americold entered into the agreement with Agro Merchants’ owner, an investor group led by funds managed by Los Angeles-based Oaktree Capital Management LP. The move will give Americold its first cold storage properties in Europe.
Agro Merchants, which has its North American headquarters in Alpharetta, Ga., owns and operates 46 cold storage properties in 10 countries. The company is the fourth largest cold storage owner in the United States and third largest in Europe. Agro Merchants serves more than 2,900 customers across multiple industries.
“We are confident that by joining Americold, we will accelerate our growth and by combining our complementary networks, we will be able to provide a more comprehensive range of solutions to customers around the world,” says Carlos Rodriguez, CEO of Agro Merchants.
Americold is the only publicly traded REIT specializing in cold storage, which is seeing an influx of investment and leasing demand since the onset of the pandemic. According to a June report from Vyzn Research, the global cold storage sector is estimated to be valued at $218 billion but will reach $320.2 billion by 2025, an annual compound growth rate of 8 percent.
Vyzn surmises that increasing cold storage activity stems from the rise in demand for processed food and the increasing need for its preservation, as well as e-commerce’s growing involvement in the food and beverage industry and increasing foreign direct investment in Asia’s supply of temperature-controlled facilities.
Specifics of the acquisition
The Agro Merchants portfolio features 26 facilities in Europe, including the United Kingdom, Netherlands, Portugal, Ireland, Austria, Spain and Poland. The U.S. portion of the portfolio features 17 facilities in six Southeastern states, as well as New Jersey and California.
Agro Merchants also has two facilities in Brisbane, Australia and a 65 percent interest in a one-facility operator in Chile. The portfolio also includes a 22.1 percent interest in a joint venture with Comfrio Soluções Logísticas, which operates 13 refrigerated warehouses throughout Brazil.
Americold will acquire Agro Merchants’ in-place call options to purchase the unowned interests in Chile and Brazil.
“The acquisition of Agro represents a unique opportunity to acquire an institutional-quality global portfolio that facilitates our strategic entry into Europe and adds complementary locations in the U.S., South America and Australia, where Americold is already established,” says Fred Boehler, president and CEO of Americold.
Americold’s purchase will utilize $554.3 million in the firm’s common shares; $519 million in cash; repayment of approximately $560 million of in-place Agro debt; and assumption by Americold of approximately $110 million of in-place Agro Merchants’ capital leases and sale-leaseback financing obligations.
Citigroup is acting as exclusive financial advisor to Americold. King & Spalding LLP and Freshfields Bruckhaus Deringer are acting as legal advisors to Americold.
Moelis & Co. LLC is acting as exclusive financial advisor to Agro Merchants, and Latham & Watkins LLP is acting as its legal advisor.
The deal is expected to close either before the end of the year or during the first quarter of 2021.
Upon closing of the Agro Merchants acquisition, Americold’s portfolio of owned and managed sites will comprise 229 facilities across four continents.
Americold’s stock price closed on Monday, Oct. 12 at $38.28 per share, up from $37.38 a year ago.
— John Nelson