IFM Investors is set to acquire a North American pipeline operator via its global infrastructure fund, adding to its assets in the region.
IFM entered a definitive agreement to acquire all outstanding public common units of NYSE-listed Buckeye Partners, a large US operator for pipeline for liquid petroleum products.
The transaction values Buckeye at for a $9.3 billion equity value.
"This acquisition is aligned with IFM's focus on investing in high quality, essential infrastructure assets that underpin the economies in which they operate," IFM head of infrastructure Julio Garcia said.
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The all-cash transaction represents a 27.5% premium to Buckeye's closing unit price on May 9 and a 31.9% premium to Buckeye's volume-weighted average unit price since 1 November 2018, which is the last trading day prior to Buckeye's announcement of certain strategic actions.
"Buckeye's board of directors recently reviewed strategic options for the business and determined that IFM's proposal to acquire Buckeye is in the best interest of Buckeye," said Buckeye chief executive, chair and president Clark C. Smith.
"The proposed transaction will provide immediate and enhanced value for our unitholders with an attractive premium that accelerates long-term returns and represents the underlying value of our business."
In addition, the proposed transaction will provide Buckeye with access to capital to implement its long-term business strategy, he added.
Buckeye owns and operates one of the largest diversified networks of integrated midstream assets, including 6000 miles of pipeline with over 100 delivery locations and 115 liquid petroleum products terminals with aggregate tank capacity of over 118 million barrels.
IFM is also invested in an American natural gas liquefaction facility called the Freeport LNG and another pipeline infrastructure asset in North America.