Brookfield Infrastructure Partners LP agreed to buy Triton International Ltd., the world’s largest owner of intermodal shipping containers, for $4.7 billion to expand in transportation logistics supporting the global supply chain.

Toronto-based Brookfield will pay $85 a share, including $68.50 in cash, the companies said early April 12, which is a 35% premium to Triton’s closing price April 11. The acquisition, which needs the approval of Triton shareholders and regulators, is expected to be completed in Q4 2023.

Triton rose 32% to $83.06 as of 12:31 p.m. in New York April 12, while Brookfield Infrastructure shares were little changed.

“Triton is an attractive business with highly contracted and stable cash flows, strong margins and a track record of value creation,” Brookfield Infrastructure chief executive officer Sam Pollock said in a statement. The transaction brings  “strong downside protection and a platform for growth in the transportation and logistics sector,” he said.

Including debt, the deal is worth $13.3 billion.

‘Attractive’ Yield

While deal flow was expected to slow down this year, the acquisition brings “an attractive estimated going-in cash yield of 13-15%,” National Bank analyst Patrick Kenny said in a note to clients.

Global supply chains were disrupted for years by the COVID-19 pandemic, though pressures have eased lately. Shipping delays, plus the war in Ukraine, have disrupted manufacturing and caused food shortages, adding to inflation.  

Triton’s shares had doubled in the past three years before April 12’s deal announcement. The firm, which is based in Bermuda and listed on the New York Stock Exchange, has a fleet of more than 7 million 20-foot-equivalent container units.

After closing, Brookfield Infrastructure’s equity investment is expected to be about $1 billion, including shares of the Canadian company.