A major buyout is on the table for Triton International (NYSE:TRTN), and TRTN stock is rising on the news. The intermodal container leasing company announced that it has agreed to be acquired by Brookfield Infrastructure (NYSE:BIP).
This take-private deal includes both cash and stock payments, valuing the company at $13.3 billion. As TipRanks reports, “this deal represents a 35% premium to Triton’s closing share price on April 11 and a 34% premium to the 30-day volume-weighted average share price.”
TRTN stock has been surging since the news broke, rising in pre-market trading and continuing after markets opened. While the deal will lead to the company being taken private, the market is reacting quite well to news of the acquisition today.
What does this mean for the future of both companies? Let’s take a closer look and assess what investors should be expecting.
What’s Happening With TRTN Stock?
As noted, TRTN stock surged in pre-market trading today, rising 25%. Since then, it has only kept climbing. As of this writing, shares are up 31% for the day and show no signs of slowing down. The deal comes after a month of very little price action, during which the stock remained stagnant.
However, it seems that TRTN is destined to close out its time on the New York Stock Exchange in the green. BIP stock is also rising on the news, though not by anywhere near as much.
The acquisition makes plenty of sense for Brookfield. As InvestorPlace contributor Bob Ciura reports, Triton boasts massive scale given its fleet of almost four million shipping containers. And according to Reuters, Brookfield is focused on expanding its transportation and logistics operations. Triton clearly offers it the perfect exposure to a market that is expected to keep growing in the near future. Per Brookfield CEO Sam Pollack:
“This transaction provides Brookfield Infrastructure with a high going-in cash yield, strong downside protection, and a platform for growth in the transportation and logistics sector. The transaction consideration also provides the opportunity for Triton shareholders to benefit from owning a globally diversified portfolio of infrastructure assets within a platform that has a proven history of generating long-term value for its shareholders.”
Brookfield has offered Triton investors $85 per share, with $63.80 in cash and $16.50 in BIPC class A exchangeable shares. Given how much TRTN stock has surged since yesterday, this buyout seems like a win for all parties involved.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
