Fortress Transportation and Infrastructure Investors LLC completed the acquisition of Transtar LLC. from United States Steel Corporation (NYSE:X) for approximately $340 million.
July 27, 2021
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Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (FTAI) entered into a membership interest purchase agreement to acquire Transtar LLC. from United States Steel Corporation (NYSE:X) (USS) for approximately $640 million on June 7, 2021. The consideration will be paid in cash and is subject to certain customary adjustments. In a related transaction, the parties will enter into a transition services agreement and a railway services agreement for an initial term of 15 years from and after the closing of the transaction. FTAI entered into a debt commitment letter with a senior unsecured bridge term loan facility of up to $650 million in order to finance the transaction. In case of termination, FTAI will be required to pay a termination fee of $32 million.
The transaction is subject to customary closing conditions including receipt of certain regulatory approvals and approval from Surface Transportation Board. The transaction is expected to close in the third quarter of 2021. The transaction is highly accretive for FTAI and its shareholders. The divestiture will generate immediate incremental value for USS stockholders by monetizing a non-core asset, while better aligning USS's operating focus on its core business. The proceeds of the transaction will be used by USS for general corporate purposes and to further strengthen its balance sheet, including deleveraging. Morgan Stanley Senior Funding, Inc. and Barclays Bank PLC acted as financial advisors to FTAI. Terence Hynes, James D. Weiss, Suresh T. Advani, Daniel F. Allison, Timothy E. Kapshandy, Karen Kazmerzak, Benjamin A. Rosemergy, Matthew J. Warren, Maureen M. Crough and Scott J.F. Goldstein of Sidley Austin LLP acted as legal advisors to FTAI. Citigroup Global Markets Inc. acted as financial advisor to USS. David A. Grubman and George Hunter of Jones Day and Baker & Miller PLLC acted as legal advisors for USS.
Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) completed the acquisition of Transtar LLC. from United States Steel Corporation (NYSE:X) for approximately $340 million on July 28, 2021. Total consideration was $636.007 million. As part of the acquisition, Fortress acquired Cash and cash equivalents of $8.61 million.
FTAI Aviation Ltd. owns and maintains commercial jet engines with a focus on CFM56 engines. The Company's segments include Aviation Leasing and Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers. The Aerospace Products segment develops and manufactures through a joint venture, and repairs and sells, through arrangements, aircraft engines and aftermarket components for aircraft engines. The Company's portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to its airline, lessor, and maintenance, repair, and operations customer base. Additionally, it owns and leases jet aircraft, which often facilitates the acquisition of engines at attractive prices. It invests in aviation assets and aerospace products. It also owns and manages approximately 330 aviation assets.
Fortress Transportation and Infrastructure Investors LLC completed the acquisition of Transtar LLC. from United States Steel Corporation (NYSE: X) for approximately $340 million.
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