chapter 7
American Roadtrip
1 Its headquarters are still in New Orleans today, on Poydras Street.
2 Peter Stokes, MIC’s chief executive at the time, would later speak in great detail of the mechanics of the bulk liquid storage industry and the plans for expansion.
4 With the issuance of $125 million in new MIC shares to the sellers, White Deer Energy and Blue Water Energy, as well as $46.5 million in cash. https://www.businesswire.com/news/home/20170802006259/en/IMTT-Enters-Agreement-Acquire-Epic-Midstream
5 Through MIC.
7 It has a feel of proud conservatism, a camp of the Louisiana Army National Guard, and ‘the only museum in the entire state of Louisiana dedicated to municipal government,’ which is quite the claim to fame. Alcohol was banned here until 2013.
8 The deal valued Cleco at US$4.7 billion including $1.3 billion of assumed debt. It would take until 2016 to get regulatory approval. By this stage, eight years after Murray Bleach and his colleagues were rattling around looking for deals like IMTT at the other end of Louisiana, Macquarie was quite the veteran of American infrastructure business, and by now could boast $6 billion of acquisitions including various port terminals, toll roads, telecommunication towers and waste disposal businesses. https://www.cleco.com/media/press-releases/detail/2014/10/20/cleco-enters-agreement-to-be-acquired-by-north-american-investor-group-led-by-macquarie-infrastructure-and-real-assets-and-british-columbia-investment-management-corporation
9 The Roman numerals represent the iteration of the fund, so this was the third Macquarie Infrastructure Partners vehicle. Needless to say, Macquarie Capital (USA) was the financial adviser.
11 EBITDA, or earnings before interest, taxes, depreciation and amortisation, is a measure of core profitability. It tells you how an operating business is doing before considering other things like debt.
12 At the time it was known as Aligned Energy. https://www.mirafunds.com/au/en/our-insights/case-studies/aligned-energy.html
13 Macquarie Infrastructure Partners bought in to Lagoon Water Solutions in 2018 and committed up to US$500 million to support growth in its systems and assets. It provides water solutions to oil and gas producers in the Anadarko Basin and owns disposal facilities, transfer trucks and pipeline assets. https://www.businesswire.com/news/home/20180910005669/en/Lagoon-Water-Solutions-and-Macquarie-Infrastructure-Partners-to-Continue-Development-of-Water-Midstream-Infrastructure-Business
15 ‘We owned it in one of our infrastructure funds that was timing out and therefore we had to dispose of our stake in it, which we did in 2019,’ says David Fass. ‘We were sad to have to say goodbye to our stake in Puget the first time. We really felt part of the transformation of that company from a traditional, publicly traded utility into something that was very actively managed by Macquarie.’
17 There is a trend towards longer-dated, if not perpetual, funds across the world. A dedicated utilities strategy focused on Europe is an example of shifting term models. ‘It’s not quite perpetual, but it has a bias toward a very long-dated term, at least twenty years, with extension mechanisms built into the fund,’ says Leigh Harrison, head of real assets for Macquarie Asset Management. ‘Some portfolio companies lend themselves to longer hold periods.’
18 At an enterprise value of US$514 million https://www.businesswire.com/news/home/20210614005830/en/Macquarie-Infrastructure-Corporation-Announces-Agreement-to-Sell-MIC-Hawaii-Completes-Pursuit-of-Strategic-Alternatives
20 The enduring exceptions being listed funds in South Korea and Mexico.
21 Macquarie Infrastructure Partners announced the acquisition of Bluebird Network in January 2019. https://www.businesswire.com/news/home/20190115005915/en/Bluebird-Network-to-be-Acquired-by-Macquarie-Infrastructure-Partners
22 Macquarie Infrastructure Group and Cintra, through a joint venture called Skyway Concession Company, bid US$1.83 billion for Skyway. This was thought to be more than double the next highest bidder.
23 https://usa.streetsblog.org/2014/11/19/how-macquarie-makes-money-by-losing-money-on-toll-roads/
24 The JV that bought the Indiana Toll Road filed for bankruptcy in September 2014, $6 billion in debt, and agreed a sale to Australian pension fund group IFM Investors for $5.7 billion including debt in 2015. In February 2016 Ferrovial and Macquarie sold Skyway to Calumet Concession Partners, a consortium of three Canadian pension funds Macquarie knew well: Ontario Teachers’ Pension Plan, CPPIB and Omers. Macquarie came out of this one in better shape with a US$2.8 billion sale.
25 A consortium including Macquarie Essential Assets Partnership sold Michigan Electric Transmission to ITC Holdings for US$486 million in cash and US$70 million in shares of ITC Holdings common stock in 2006 in a deal which also involved ITC assuming US$311 million of debt. MEAP had accumulated its stake through 2003–04. https://trimarancapital.com/uncategorized/itc-holdings-signs-agreement-to-acquire-michigan-electric-transmission-company/
26 Buying an asset that straddles two different nations doesn’t sound straightforward, but as always Macquarie had a twist. ‘What we were actually purchasing was the toll revenue and operations on the US side, and management on behalf of the City of Windsor of the toll collection and the operations on the Canadian side,’ says Michael Smerdon. So it was a US asset providing management services to a Canadian counterpart. Still, it needed presidential approval.
27 As explained in the Canada section, it took Macquarie two bids and a great deal of persistence to get a stake in the thing, which it eventually did from two different directions at once.
28 A side note: did you know much of downtown Toronto doesn’t use air conditioning because it is instead cooled by water drawn from pipes at the bottom of the lake, where the water is reliably extremely cold, and then distributed through more than a hundred heat exchangers beneath Toronto’s commercial towers? One imagines that even though Macquarie doesn’t own that asset today, it probably will sooner or later.
29 Macquarie has just signed a lease at 660 Fifth Avenue, a building once owned by the family of Trump aide Jared Kushner; they’ll have to wait a while before moving in, though, because at the time of writing it is amid a US$400 million redevelopment by Brookfield Asset Management, an enterprise which in many ways resembles Macquarie.
30 His formal title is chief executive officer and project executive of NYNJ Link Developer LLC, which is a special purpose public-private partnership company owned 90 per cent by Macquarie Infrastructure Partners and 10 per cent by Kiewit Development Company.
32 Strictly speaking, the Maher sons sold to a fund managed by Deutsche Bank, and then Deutsche moved the investment onto its own balance sheet after the global financial crisis.
33 . . . the other being Los Angeles, which is why Macquarie funds have also invested in both Los Angeles and Long Beach.
34 Deutsche was clearly going to have to sell because it so badly needed capital elsewhere, but Macquarie spent a year coaxing, offering multiple indicative offers. Deutsche eventually decided to sell in a broad auction, but had an unresolved legal issue with the Port Authority having sued it over the rent, and the Port Authority—which had full approval rights—wouldn’t approve the sale until that was resolved.
At this point, the relationship Macquarie already had with the Port Authority from Goethals helped. It presented a case and the deal went ahead. ‘We really wore out our shoe leather for twelve months chasing Maher,’ Paul says.
35 It became Macquarie Investment Management, and then (because of course they can’t keep the same divisional name for more than a few years without messing around with it) Macquarie Asset Management.
