Brookfield Infrastructure Eyes $400 Million More in Acquisitions

(Bloomberg) -- Brookfield Infrastructure Partners said it has another $400 million worth of deals in the pipeline after a flurry of acquisitions in the past two months.

The publicly traded infrastructure arm of Brookfield Asset Management said in a letter to investors Thursday it had invested about $1.3 billion of its own capital on three transactions. It acquired data centers from AT&T in June and Canadian natural gas gathering and processing business from Enbridge last month. On Wednesday, it bought Enercare Inc., a Canadian air conditioner, water heater and furnace provider.

Brookfield Infrastructure said it had another $400 million worth of initiatives under exclusivity agreements and in the final stages of due diligence. It didn't disclose the targets.

“Our primary objective is to invest globally at the best risk-adjusted returns, meaning we are typically agnostic about our geographic mix of assets,” Brookfield Infrastructure Chief Executive Officer Sam Pollock said in the letter. “We are pleased to have recently secured three large scale North American investments.”

Brookfield Infrastructure also has earmarked about $1 billion worth of assets that it plans to sell over the next year, adding to its $4 billion in liquidity, he said.

Pollock said the three acquisitions this summer were part of its focus on the data infrastructure and energy sectors, where it has seen a lot of value.

Carve Outs

“Another contributing factor to our success has been our ability to apply our expertise in executing ‘carve out' transactions,”Pollock said, referring to the AT&T and Enbridge deals. “Although these companies do not consider these businesses to be strategic, we are excited about the potential to own and operate them.”

Carve-outs are particularly attractive because few financial investors are interested, he said. They also tend to receive less attention because they're considered non-core, so Brookfield Infrastructure can add significant value, in part, with more focused management.

Brookfield Infrastructure also disclosed its second-quarter results Thursday. It reported funds from operation of 75 cents a unit. That's compared with analyst expectations of 76 cents a share but down from 80 cents a share last year, according to data compiled by Bloomberg. This year's results were affected by the sale of assets and the time required to redeploy that capital on new investments, the Toronto-based company said.

“With business conditions generally good and conducive to solid growth, our outlook is very positive,” Pollock said. “While the risk of a prolonged trade war could have an impact on global economic activity, we believe our business is for the most part insulated, given our predominantly regulated and contracted cash flow streams, our well-diversified operations and our strong balance sheet.”

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Matthew Monks

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