IFM Investors through its IFM Global Infrastructure Fund has agreed to acquire US midstream company Buckeye Partners for $6.5bn in an all-cash deal.
Headquartered in Texas, Buckeye Partners is a publicly traded master limited partnership which is engaged in offering midstream logistic solutions, in particular, the transportation, storage, processing and marketing of liquid petroleum products.
The company owns and operates nearly 9,656km of liquid petroleum products pipeline with more than 100 delivery points and 115 liquid petroleum products terminals with total tank capacity in the excess of 118 million barrels.
Buckeye Partners’ network of marine terminals is mainly located in the US East Coast and Gulf Coast regions and also in the Caribbean.
The company’s flagship marine terminal is the Buckeye Bahamas Hub located in The Bahamas. With 21.6 million barrels of storage capacity, the Buckeye Bahamas Hub is considered to be among the largest marine crude oil and refined petroleum products storage facilities in the world.
IFM executive director executive director said: “We are pleased to have the opportunity to bring the Buckeye business and management team under the IFM umbrella.
“The proposed acquisition of Buckeye is a complementary addition to IFM’s substantial investments in energy infrastructure across North America and globally. We look forward to supporting the continuing growth of the business.”
The transaction is valued at $10.3bn in enterprise value with IFM offering to pay the pipeline operator $41.50 per share.
Buckeye chairman, president and CEO Clark Smith said: “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.
“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 superior access to capital to execute on its long-term business strategy. We look forward to this next chapter in Buckeye’s 133-year story.”
The transaction is likely to be completed in the fourth quarter of this year based on meeting of customary closing conditions.