Back to top

Analyst Blog

Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report) has entered into an agreement with an undisclosed buyer to sale its interest in the U.S. Pacific Northwest timberland operations. The total deal value was $790 million. This transaction will help the partnership to generate $470 million, after paying a debt of roughly $320 million. The divesture is expected to close in Jul 2013.

It is evident from Brookfield Infrastructure’s activities that the partnership strongly follows strong timber assets divestment strategy. On Jun 7, 2013, the partnership completed the sale of the remainder of its Canadian BC Coastal timberland operations. Brookfield Infrastructure generated net proceeds of approximately $170 million from this deal.

With the present divesture, Brookfield Infrastructure has sold its entire timberland assets primarily due to lower-than-expected return. In first-quarter 2013, timber segment reported net income and funds from operations of $6 million and $11 million, respectively.

We appreciate Brookfield Infrastructure’s strategy to sale its lower yielding assets and deploy the funds out of those transactions to profitable ventures. As the partnership currently has wide array of investment prospects, it intends to reinvest the net proceeds from these transactions in the scheduled projects.

In 2012, Brookfield Infrastructure acquired an additional interest in Chilean toll road and in the largest toll road operator in Brazil. These transactions will enable the partnership to reposition its assets, which will in turn, strengthen its energy, transport and utilities portfolio.

In addition, Brookfield Infrastructure also intends to utilize the funds to maximize shareholders’ wealth with pre-planned after-tax return on equity of 12% to 15% per annum.

Toronto, Canada-based Brookfield Infrastructure is primarily engaged in the ownership and operation of premier utilities, transport and energy, and timber assets in North and South America, Australasia and Europe. The partnership operates high quality, long-life assets that generate stable cash flows and require relatively minimal maintenance capital.

Brookfield Infrastructure currently has a Zacks Rank #4 (Sell). Other stocks in the industry that are worth considering include CPFL Energia S.A. (CPL - Snapshot Report) and Companhia Paranaense de Energia (ELP - Analyst Report) with a Zacks Rank #1 (Strong Buy), and ALLETE, Inc. (ALE - Snapshot Report) with a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%