Macquarie Infrastructure Corporation to sell Atlantic Aviation to KKR for USD4.475bn

Macquarie Infrastructure Corporation and KKR have signed a definitive agreement for MIC to sell its Atlantic Aviation business to KKR for USD4.475 billion in cash and assumed debt and reorganisation obligations. Atlantic Aviation operates one of the largest networks of fixed base operations (FBOs) in the US providing a full suite of critical services to the private aviation sector. 

The purchase price implies a multiple of Atlantic Aviation’s 2019 Earnings Before Interest Taxes and Depreciation (EBITDA) of 16.2 times. 

MIC expects to receive USD3.525 billion at closing following the reorganisation of MIC into a limited liability company, Macquarie Infrastructure Holdings LLC (MIH). The reorganisation was approved by MIC shareholders on May 6, 2021 and is expected be completed shortly before the closing of the Atlantic Aviation sale. 

The Atlantic Aviation sale is expected to result in cash proceeds of approximately USD3.298 billion being available for distribution to unitholders after a disposition payment by MIH to MIC’s external manager of approximately USD227 million. The disposition payment was calculated in accordance with the Disposition Agreement entered into by and between MIC and the Company’s external manager on October 30, 2019. The MIH board of directors is expected to authorise a cash distribution of approximately USD37.35 per unit following closing of the transaction. 

“We are proud of the robust growth Atlantic Aviation has achieved under our ownership which resulted in strong interest from prospective buyers during the sale process,” says Christopher Frost, chief executive officer of MIC. “We are pleased with the outcome of the sale process and the unlocking of additional value for MIC shareholders. In addition to the timely closing of a sale of Atlantic Aviation our focus remains on successfully concluding the sale process for our MIC Hawaii business.” 

“Atlantic Aviation has an outstanding reputation as a leading operator of critical aviation infrastructure across the US,” says Dash Lane, Partner at KKR. “With our focus on providing long-term capital to support the growth of high quality and resilient businesses, we are excited to invest alongside Atlantic’s experienced team and strong existing platform which we believe is well positioned to capitalise on multiple avenues of future growth.” 

The sale of Atlantic Aviation is expected to close in the fourth quarter of 2021, subject to customary regulatory approvals and approval from MIC shareholders. MIC expects to seek approval of the Atlantic Aviation sale at a Special Meeting of Shareholders to be conducted as soon as practical following clearance of the related proxy statement by the Securities and Exchange Commission. 

KKR is making its investment in Atlantic Aviation primarily through its Global Infrastructure Investors and Core Investments strategies. 

Lazard and Evercore acted as financial advisors and White & Case acted as legal advisor to MIC in connection with the sale of Atlantic Aviation. Jefferies LLC served as financial advisor and Kirkland & Ellis as legal advisor to KKR.