Americold Realty Trust Announces Acquisition and Development Activity Totaling $575 Million

Rhea-AI Summary

Americold Realty Trust (NYSE: COLD) has acquired Hall's Warehouse Corporation for $480 million to expand its presence in the Northeastern US. This acquisition adds eight facilities totaling 58 million cubic feet and 200,000 pallet positions, serving 220 customers with a 95% occupancy rate. Americold also announced two expansion projects in Arkansas and Calgary, costing $84 million and $11 million, respectively. Funding will come from equity offerings and debt placements, including €750 million in senior unsecured notes.

Positive

• Acquisition of Hall's enhances presence in a key market with high occupancy.
• Expansion projects expected to increase capacity and revenue potential.
• Investment represents a net entry NOI yield of 6.3%.

Negative

• Funding expansion through debt may raise financial strain.
• Integration challenges may arise post-acquisition.

ATLANTA--(BUSINESS WIRE)--Americold Realty Trust (NYSE: COLD) (the “Company” or “Americold”), the world’s largest publicly traded REIT focused on the ownership, operation, acquisition, and development of temperature-controlled warehouses, today announced that it has acquired South Plainfield, New Jersey-based Hall’s Warehouse Corporation (“Hall’s”) for $480 million. Americold also announced two expansion projects, including a build-to-suit expansion in Arkansas for a top tier customer and an expansion of the Company’s existing Calgary facility, which was acquired earlier in the year with the acquisition of Nova Cold, for $84 million and $11 million, respectively. The acquisition of Hall’s and the expansion projects will be funded with a combination of proceeds from recent equity offerings and debt private placements.

“We are excited to expand our operating footprint in the Northeastern United States and advance two development opportunities, which enhance our ability to serve current and new customers while strengthening our network in North America. Through the Hall’s acquisition, we have acquired a fully integrated portfolio of high-quality facilities located near the Port of Newark. This portfolio complements our growing scale in a key market that is located within one day’s drive of approximately 30% of the population in the United States,” stated Fred Boehler, President and Chief Executive Officer of Americold Realty Trust.

Mr. Boehler continued, “The Russellville, Arkansas highly automated expansion is an opportunity to provide mission critical, long term infrastructure for Conagra Brands, a top tier strategic customer and one of North America's leading branded food companies. With the Calgary expansion project, we will add scale in an existing market that is currently at capacity, helping us realize the embedded growth opportunities that were underwritten at the time of the acquisition of Nova Cold. 2020 has been an important year of growth for our company. Today’s announcement underscores our commitment to ongoing disciplined and profitable growth to create further value for our shareholders and other stakeholders while meeting increasing temperature-controlled storage demand around the world.”

The Hall’s Warehouse Corporation portfolio consists of eight facilities in Northern New Jersey, totaling 58 million cubic feet and 200,000 pallet positions. This fully integrated portfolio serves 220 customers and is 95% occupied. All facilities are located within 15 miles of each other and 30 miles from the Port of Newark. Five of the facilities are owned, with the remainder leased, and the portfolio is complementary to Americold’s current and growing footprint in the Pennsylvania and New Jersey markets. Hall’s also provides transportation services that support its warehouse customers. This acquisition, which closed on November 2, 2020, is immediately accretive on a leverage neutral basis and the Company’s investment represents an in place net entry NOI yield of 6.3%.

Bill Jayne III, Owner and President of Hall’s, added, “The Jayne family founded Hall’s over 55 years ago with the core belief that an unwavering focus on customer service provides the foundation for long term growth and success. We are pleased to entrust our legacy to Americold and are confident that this acquisition will provide enhanced opportunities for our customers and associates.”

The Company’s expansion project in Russellville, Arkansas will increase the capacity of its existing production advantaged facility by approximately 13 million cubic feet and 42,000 pallet positions for an expected total cost of $84 million. The highly automated facility will be a dedicated build for Conagra Brands. Concurrent with the project, Conagra will be on a fixed commitment pricing structure for a 20-year term. Americold expects to begin construction by the end of 2020, with a targeted completion date by the end of 2022.

The facility Americold plans to expand in Calgary, Canada was acquired as part of the Company’s acquisition of Nova Cold Logistics earlier this year. The expansion will add 2 million cubic feet and 7,000 pallet positions to the Company’s existing conventional facility in Calgary, currently the largest cold storage facility in Western Canada, for approximately $15 million CAD, or $11 million US dollars. The Calgary cold storage market serves a population of approximately 1.5 million people and is currently at capacity. Americold has a diverse mix of existing customers there, and new customers in its pipeline. The Company expects to begin construction immediately, with a targeted completion date by the end of 2021.

The Company anticipates that the returns on both expansion projects will be consistent with the Company’s stated return expectations for such projects upon stabilization.

In order to fund the debt component of these investments, along with the Company’s previously announced acquisition of Agro Merchants Group, the Company recently priced an aggregate amount of €750 million of senior unsecured notes in an institutional private placement. This private placement consists of two tranches: €400 million of senior unsecured notes that are due January 7, 2031 and carry an interest rate of 1.62% and €350 million of senior unsecured notes that are due January 7, 2033 and carry an interest rate of 1.65%. The Company anticipates closing and funding these notes concurrent with the closing of the Agro acquisition.

Forward-Looking Statements

This press release contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future financial and operating performance and growth plans, taking into account the information currently available to the Company. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause the Company’s actual results to differ materially from the expectations of future results the Company expresses or implies in any forward-looking statements, and you should not place undue reliance on such statements.

Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” and similar expressions are intended to identify such forward-looking statements. The Company qualifies any forward-looking statements entirely by these cautionary factors. Other risks, uncertainties and factors, including those discussed under the heading “Risk Factors” in the Company’s annual report on Form 10-K for the year ended December 31, 2019, in our Quarterly Report for the quarter ended March 31, 2020, in our Form 8-K filed April 16, 2020 and in our Form 8-K filed on October 13, 2020, could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company assumes no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

About Americold Realty Trust

Americold is the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. Based in Atlanta, Georgia, Americold owns and operates 185 temperature-controlled warehouses, with over 1 billion refrigerated cubic feet of storage, in the United States, Australia, New Zealand, Canada, and Argentina. Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors and retailers to consumers.