Americold Realty Trust continues to grow its footprint with its announcement that it has entered in a definitive agreement to buy privately-held Agro Merchants Group from an investor group led by funds managed by Oaktree Capital Management, L.P. for $1.74 billion in a cash-and-stock transaction. The acquisition is subject to customary and regulatory closing conditions and closing is expected to occur late in the fourth quarter of 2020 or early in the first quarter of 2021.

The transaction consists of $554.3 million in Americold common shares, which will be subject to a lockup period until May 17, 2021, $519 million in cash, repayment of approximately $560 million of in-place Agro debt and the assumption of approximately $110 million of in-place Agro capital leases and sale leaseback financing obligations. The latter is to be off-set by any cash on hand net of debt-like items and working capital adjustments.

Based on estimated 2020 adjusted results, including historical results through July, Americold underwrote the transaction assuming a net entry NOI yield of approximately 6.3% and an implied Adjusted EBITDA multiple of 22.3x. Americold expects the NOI yield to stabilize at 7.3%-8.3% by the end of year five after closing.