FRONT STORY REAL-ESTATE INVESTMENT TRUSTS
Americold prepares for expansion
Plenty of support for US$725m IPO
AMERICOLD REALTY, the Ron Burkle-controlled cold-
storage REIT, has no peer, at least not one that is
public. Typically a lack of comps is a good thing,
since it suggests a long runway for growth.
Americold, which Burkle attempted to
take public in 2010, found plenty of investor
support for its US$724.8m IPO, even in the
face of rising interest rates.
Bank of America Merrill Lynch, JP Morgan and RBC
Capital Markets substantially upsized the offering
on Thursday morning to 40.3m shares from 24m
shares, while maintaining price talk at US$14–
$16. That evening, they upsized yet again to
45.3m shares before pricing at US$16.00.
Though the original deal was all primary, the
initial upsizing was entirely secondary, allowing
"URKLEûANDûINVESTMENTûVEHICLESûAFlLIATEDûWITHû
Goldman Sachs to reduce their stakes to 47.7%
and 18.6%, from 69.5% and 26.4% previously. The
second upsizing, another 5m shares, was all
primary, to take primary proceeds to US$464m.
Americold stock opened at US$17.15, 7.25%
above pricing. Approximately 70% of the deal
went to the top 10 accounts.
Americold operates 160 warehouses
globally, including 142 in the US, with a
combined 945.3m cubic square feet of
storage. That makes it the largest operator,
with a 20.9% market share domestically and
4.5% globally on the basis of square footage.
“It’s a very fragmented market. We think
there are good opportunities for consolidation,”
said Dean Frankel, head of real estate securities
at CenterSquare Investment Management. “It is
not just what price they are buying at, but that
THEYûOPERATEûMOREûEFlCIENTLYû4HEûFROZENûFOODû
business isn’t going away.”LEVERED FOR M&A
Americold is using proceeds from stock it is
selling to repay debt, reducing net debt
LEVERAGEûTOûBELOWûlVEûTIMESû4HATûWILLûLEAVEûITû
with US$200m of cash and the full availability
of a US$400m revolving credit facility.
The REIT is looking to grow through
acquisitions that are consistent with its
GROWTHûOBJECTIVES ûWITHûAûSPECIlCûFOCUSûONû
Asia and Europe. It is also planning to spend
US$75m–$200m annually to build two to
three new facilities, as part of a current
US$1.2bn development pipeline.
“The REIT model historically has provided
a cost of capital advantage to public
companies in industries that can be rolledup,” one hedge fund manager that put in for
the IPO told IFR. “If the stock is trading at a
premium to NAV, investors are signalling to
acquire assets to grow externally.”
Americold is being valued at roughly 12
TIMESû%6ûTOû%BITDA ûONûTHEûlNALûPRICINGûANDû
based on the US$290.4m of adjusted Ebitda it
generated in the TTM ended September 30.
While it is the only publicly traded cold-
storage REIT, Americold is not the only one
competing for acquisitions. Blackstone
agreed to acquire Cloverleaf Cold Storage in
November, after it was unable to come to
terms on a purported US$3bn buyout of
Americold, according to reports at the time.
Yucaipa, the investment vehicle controlled
by Los Angeles billionaire Ron Burkle,
initially bought the cold-storage assets from
Vornado Realty Trust and Crescent in 2004.
After buying out the remaining stake in 2008,
THEûlRMûFAILEDûTOûTAKEû!MERICOLDûPUBLICûINû
2010 in a transaction that was to have been
used to acquire VersaCold.
“It was a bit of a disaster,” recalled one of the
buy-side sources. “They have taken care of all the
things they need to, to go public. Better board,
better management team, and fully integrated
systems across all of their warehouses.”
Stephen LaceyChina set for first financial-leasing IPO
Jiangsu Financial gets approval for Rmb4bn Shanghai listing
JIANGSU FINANCIAL LEASING is to launch an IPO in
China’s domestic market, opening a new
source of funding for the fast-growing,
capital-intensive sector.
The state-owned institution cleared a
China Securities Regulatory Commission
hearing on January 16 for a Shanghai IPO of
about Rmb4bn (US$622m). It still requires
written approval to proceed with the listing.
)FûTHEûmOATûGOESûTHROUGH û*&,ûWILLûBECOMEû
ONLYûTHEûSECONDûLISTEDûlNANCIAL
LEASINGû
COMPANYûINûTHEû!
SHAREûMARKET ûANDûTHEûlRSTû
to complete an IPO. Bohai Capital, a unit of
Chinese conglomerate HNA Group, went
public in Shenzhen through a backdoor
listing in 2011.
Apart from JFL, JIC LEASING and JUXIN
INTERNATIONAL LEASING are also awaiting CSRC
approval for Shanghai IPOs.
“The move signals that the regulators
HAVEûOFlCIALLYûOPENEDûTHEûDOORûFORûDOMESTICû
listings of such companies,” said a banker
working on an IPO for another
lNANCIAL
LEASINGûENTITYû(EûBELIEVESûMOREû
lNANCIAL
LEASINGûCOMPANIESûWILLûBEû
encouraged to list domestically and that
entities already listed in Hong Kong may
seek a second listing on the mainland.
3INCEû ûATûLEASTûTHREEûlNANCIAL
LEASINGû
companies have been listed in Hong Kong,
including China Development Bank
Financial Leasing, China Rongzhong
Financial Holdings and FY Financial. HAITONG
UNITRUST INTERNATIONAL LEASING, the
lNANCIAL
LEASINGûUNITûOFû(AITONGû3ECURITIES ûISû
also mulling a Hong Kong IPO.
Few companies have chosen to list
domestically because of the long approval
backlog and regulatory uncertainties,
preferring Hong Kong instead.
“A successful listing of Jiangsu Leasing will
set a benchmark for the sector in the A-sharemarket, which will be an important
reference for issuers to choose listing
destinations between the mainland and
Hong Kong,” said the banker.
!TûTHEûENDûOFû*UNEû ûlNANCIAL
LEASINGû
contracts in China amounted to Rmb5.6trn, up
19.7% year-on-year, according to a report from
THEûCOUNTRYSûlNANCIAL
LEASINGûASSOCIATION
“Financial leasing is a capital-intensive
INDUSTRY ûWHICHûNEEDSûSTRONGûlNANCINGû
ability to support business development,”
said another banker.
h#URRENTLY ûTHEûDOMINANTûlNANCINGûSOURCESû
FORûTHEûSECTORûAREûSTILLûDEBTûlNANCING ûSUCHûASû
bank loans, bonds and asset-backed securities.
So, more and more companies will consider
CARRYINGûOUTûEQUITYûlNANCINGûTOûBOOSTûCAPITALv
Jiangsu Leasing plans to offer no more
than 782m shares, or about 25% of its
enlarged company capital.
Huatai United Securities is the sponsor.
Proceeds will be used for working capital.
Ken Wang, Fiona LauEQUITIES
Australia 90 China 90 India 92 Singapore 93 South Korea 93 France 93 Germany 94 Israel 94
Nigeria 95 UAE 95 UK 95 Canada 96 United States 96 Structured Equity 100