iCON Infrastructure Partners III to acquire Capstone Infrastructure Corporation

Capstone Infrastructure Corporation has announced that it has entered into a definitive arrangement agreement with Irving Infrastructure Corp, a subsidiary of iCON Infrastructure Partners III LP, a fund advised by London, UK-based iCON Infrastructure LLP, that provides for the acquisition of all issued and outstanding common shares of Capstone and Class B exchangeable units of Capstone's subsidiary MPT LTC Holding LP.

The total equity value of the transaction is approximately US$480 million, and more specifically US$4.90 per share or unit, as applicable.

The purchase price represents a 44% premium to the closing price of Capstone's common shares of US$3.40 on January 19, 2016, and a 61% premium to the closing price of Capstone's common shares on the trading day prior to the November 23, 2015 announcement that Capstone was undertaking a strategic review process.

As previously announced on November, Capstone had retained RBC Capital Markets and TD Securities Inc. to assist management and the board of directors in reviewing and considering various alternatives involving the Corporation. Following this comprehensive review, Capstone entered into the arrangement agreement, which was unanimously approved by the board of directors of Capstone.

Both financial advisors to Capstone have rendered fairness opinions that, subject to certain assumptions, qualifications and limitations, the consideration to be received by the common shareholders and convertible debenture holders of Capstone pursuant to the arrangement agreement is fair, from a financial point of view, to Capstone's common shareholders and convertible debenture holders, respectively. 

The Capstone's board chairman V. James Sardo, said:

"Capstone has concluded a comprehensive review process that considered value maximization alternatives. The Board of Directors believes the offer from iCON Infrastructure is in the best interests of all security holders. Our goal has been to grow the company to benefit from the immense opportunities in the infrastructure sector and we are pleased that iCON Infrastructure recognizes the inherent value of Capstone's assets."

Paul Malan, Senior Partner of iCON Infrastructure, commented:

"The Capstone team has successfully built and managed a high quality portfolio of assets across Canada and Europe over the long term. Capstone's portfolio of assets is an excellent fit for iCON Infrastructure. We look forward to pursuing the continued growth of the business for many years to come."

As mentioned above, RBC Capital Markets and TD Securities acted as financial advisors to Capstone. Blake, Cassels & Graydon LLP offered them legal counsel.

On the other hand, CIBC World Markets and Scotia Capital acted as financial advisors to iCON III, while Osler, Hoskin & Harcourt LLP acted as legal counsel.