Another B.C. income trust is being bought out by a foreigner.
Versacold Income Fund (TSX:ICE.UN) is the acquisition target of Eimskip Holdings Inc., a subsidiary of Icelandic shipping and logistics giant HF Eimskipafelag Islands in a deal estimated at $525.7 million.
The deal comes less than two months after Australian consortium New World Gaming Partners Ltd. offered $1.37 billion to buy Burnaby's Gateway Casinos Income Fund.
Under Eimskip's proposal, Versacold shareholders will receive $12.25 per unit in cash. The offer represents a 23.5% premium over the volume weighted average unit price for the 90 trading days before May 9, when the fund set up a special committee to explore its strategic alternatives.
The deal will create the largest cold storage company in Canada with more than 55% of the market by combining Versacold's assets with those of Atlas Cold Storage Income Fund, which Eimskip acquired in November.
Versacold's largest shareholder, Clarke Inc., which owns 19.1% of the fund, has tendered its shares, as has KingSett Real Estate Growth LP No.2, which owns 6.4% of the fund's outstanding units.
Eimskip's acquisition of Versacold, which is subject to both shareholder and regulatory approval, is expected to be completed in late July.
Versacold had a strong first quarter as its revenue rose 5% to $178.5 million for the period ending March 31, 2007, from revenue of $170 million in the first quarter of 2006. The increase was due mainly to an increase in revenue from the company's U.S operations.
However, quarterly profits fell to $2.1 million from $5.6 million in 2006's first quarter. The drop reflected a change in the company's revenue mix. Nearly a third of the revenue increase from its U.S. operations was from its transportation segment, which has a lower margin than Versacold's warehousing business.
Versacold's unit price range during the past week: between $11.33 and $12.17; 52-week high: $12.24; 52-week low: $7.61.