8-K/A: FTAI Infrastructure Completes Acquisition of Long Ridge Energy & Power, Provides Pro Forma Financials

FTAI Infrastructure Inc. finalizes the acquisition of Long Ridge Energy & Power, presenting pro forma financials reflecting the combined entity's performance.

Summary

• FTAI Infrastructure Inc. has filed an amendment to its previous report to disclose historical consolidated financial information for Long Ridge Energy & Power LLC (LREP) and unaudited pro forma combined financial information following the acquisition of the remaining 49.9% interest in LREP.
• The acquisition involved consideration to GCM Grosvenor Inc. including a $20 million promissory note, $9 million in cash, and 160,000 shares of Series B Preferred Stock.
• The company also issued an option to its manager, FIG LLC, to purchase 2,852,049 shares of Common Stock at $5.61 per share.
• Audited consolidated financial statements of LREP for the year ended December 31, 2024, and unaudited pro forma combined financial information are included as exhibits.
• Supplemental non-GAAP financial information is also provided.
• The pro forma combined balance sheet as of December 31, 2024, and the pro forma combined statement of operations for the year ended December 31, 2024, are presented for illustrative purposes only and may not be indicative of future results.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the acquisition is a positive strategic move, the historical net loss of Long Ridge Energy & Power LLC tempers the overall outlook. The pro forma information is provided for illustrative purposes only and does not purport to represent what the company's financial position or results of operations would have been if the transactions had been consummated on the dates indicated, nor are they necessarily indicative of what the financial position or results of operations of the company will be in future periods.

Positives

• FTAI Infrastructure Inc. now owns 100% of Long Ridge Energy & Power LLC, potentially streamlining operations and decision-making.
• The provision of pro forma financial information offers investors greater clarity on the combined entity's financial standing.
• Supplemental non-GAAP financial information is provided to give the CODM the information necessary to assess operational performance, as well as make resource and allocation decisions.

Negatives

• The pro forma financial information is for illustrative purposes only and may not be indicative of future results.
• Long Ridge Energy & Power LLC had a net loss of $(60,384) thousands for the year ended December 31, 2024.

Risks

• The unaudited pro forma combined financial information does not reflect the cost of any integration activities or benefits that may result from potential revenue enhancements, anticipated cost savings and expense efficiencies or other synergies that may be achieved in the acquisition or any strategies that management may consider in order to continue to efficiently manage our operations.
• The final acquisition accounting adjustments may be materially different from the unaudited pro forma adjustments presented herein and may include (i) changes in fair values of Property, plant and equipment; (ii) changes in allocations to Intangible assets, such as customer relationships, as well as goodwill; and, (iii) other changes to assets and liabilities.
• The effective tax rate of the combined company could be significantly different (either higher or lower) depending on the post-acquisition activities and cash needs.

Future Outlook

The pro forma combined financial information is provided for illustrative purposes only and does not purport to represent what the company's financial position or results of operations would have been if the transactions had been consummated on the dates indicated, nor are they necessarily indicative of what the financial position or results of operations of the company will be in future periods.

Industry Context

This announcement reflects a continuation of consolidation trends within the infrastructure and energy sectors, as companies seek to expand their asset base and operational capabilities.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards without knowing the specific assets and operations of Long Ridge Energy & Power LLC.
• Comparable companies in the power generation sector include Calpine Corporation and NRG Energy, Inc., but direct comparisons would require a detailed analysis of asset portfolios, geographic locations, and contractual arrangements.
• The pro forma financial information provides a basis for comparison against peers following similar acquisitions, but further analysis is needed to assess relative performance.

Related Party Transactions

• The Company may, in the ordinary course of business, enter into transactions with related parties.
• For the year ended December 31, 2024, the Company had $4.7 million of natural gas revenue sourced through Diversified.
• At December 31, 2024, accounts receivable of $2.4 million represented the amount due from Diversified as cash collected on behalf of the Company from sales to third parties.
• On October 12, 2022, the Company entered into a loan agreement with affiliates, FIP and GCM.
• On November 17, 2023, the Company entered into a loan agreement with Long Ridge West Virginia.

Stakeholder Impact

• Shareholders will be impacted by the acquisition and the pro forma financial results.
• Employees of Long Ridge Energy & Power LLC may experience changes as a result of the integration.
• Customers and suppliers of both FTAI Infrastructure Inc. and Long Ridge Energy & Power LLC may see changes in their relationships with the combined entity.

Next Steps

• The company will continue to integrate Long Ridge Energy & Power LLC into its operations.
• The company will finalize the purchase price allocation within 12 months of the closing date.
• The company will monitor the performance of the combined entity and provide updates in future filings.

Key Dates

Keywords

acquisition, FTAI Infrastructure, Long Ridge Energy & Power, pro forma financials, GCM Grosvenor, Series B Preferred Stock, non-GAAP financial information, Adjusted EBITDA, financial statements