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MIC offers LLC shares to fund BEC purchase

Macquarie Infrastructure Capital will issue $350m worth of shares to finance its impending acquisition of the 512-megawatt gas-fired power plant.

Macquarie Infrastructure Capital (MIC) yesterday launched a public offering of 4.735 million new LLC interests, or shares, to offset the expected costs associated with the purchase of the Bayonne Energy Center (BEC).

Additionally, MIC announced that they will grant underwriters a 30-day green shoe option to purchase up to an additional 656,250 shares to cover over-allotments, should any occur. This one-day, marketed deal has a face value of $350 million, and will be priced after the close of market today, a source close to the matter told Infrastructure Investor. 

“MIC expects to use the net proceeds from the offering to finance the cash consideration for the acquisition of the assets of Bayonne Energy Center and for general corporate purchases,” the firm said in a statement. “The company expects the transaction to close in the first half of 2015, subject to regulatory approval and satisfaction of customary conditions precedent.”

Barclays, Macquarie Capital, JP Morgan, RBC Capital Markets and SunTrust Robinson Humphrey will act as joint book-runners for the offering. 

BEC is a 512-megawatt gas-fired power generating facility located in Bayonne, New Jersey. MIC agreed to buy the facility from an ArcLight Capital Partners affiliate earlier this month for $210 million in cash plus $510 million in debt maturing in 2021.

Upon announcing its plan to acquire BEC on the 2nd of February, MIC saw its stocks rise from $72.61 to $73.15 by the next morning. The price last week peaked at $80.05 per share, a 52-week high for the company. 

“We're pleased to diversify and strengthen our Contracted Power and Energy segment with the acquisition of the Bayonne Energy Center,” James Hooke, chief executive of MIC, said upon announcement of the acquisition.

Hooke added that one of the major benefits of the BEC acquisition is the plant's close proximity to another MIC-owned asset, International Matex Tank Terminals (IMTT) – Bayonne, an independent bulk liquid terminals business. 

“Given its proximity to IMTT – Bayonne, we are familiar with BEC – it is an exceptional business to add to our growing CP&E portfolio,” Hooke said. 

MIC is authorised to issue up to 500 million shares, and has 71 million shares outstanding with a market cap of $5.7 billion, a representative said. Last year, the company issued 14.8 million shares, with 13.2 million of those related to the acquisition of the final 50 percent stake in IMTT.

MIC declined to comment on the issuance.