UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:
☐		Preliminary Proxy Statement
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☒		Definitive Proxy Statement
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☐		Soliciting Material Pursuant to §240.14a-12

LANDMARK INFRASTRUCTURE PARTNERS LP

(Name of Registrant as Specified in Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

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400 Continental Blvd., Suite 500, El Segundo, CA 90245

TRANSACTIONS PROPOSAL—YOUR VOTE IS VERY IMPORTANT

Dear Landmark Infrastructure Partners LP Unitholders:

On August 21, 2021, Landmark Infrastructure Partners LP, a Delaware limited partnership (the “Partnership”), together with its general partner, Landmark Infrastructure Partners GP LLC, a Delaware limited liability company (the “Partnership GP”), and its subsidiaries Landmark Infrastructure REIT LLC, a Delaware limited liability company (“REIT LLC”), and Landmark Infrastructure Inc., a Delaware corporation (“REIT Subsidiary”, and together with the Partnership, the Partnership GP and REIT LLC, the “Partnership Parties”), entered into a definitive Transaction Agreement (the “Transaction Agreement”) with LM DV Infrastructure, LLC, a Delaware limited liability company (“LM DV Infra”), LM Infra Acquisition Company, LLC, a Delaware limited liability company (“LM Infra”), Digital LD MergerCo LLC, a Delaware limited liability company (“Merger Sub”), Digital LD MergerCo II LLC, a Delaware limited liability company (“Merger Sub II”, and together with LM DV Infra, LM Infra and Merger Sub, the “Buyer Parties”), and, solely for purposes set forth therein, Landmark Dividend LLC, a Delaware limited liability company (“Landmark Dividend”).

Pursuant to the Transaction Agreement and subject to the satisfaction or waiver of certain conditions therein, LM Infra will acquire all of the assets of the Partnership through the following series of transactions: (a) LM DV Infra will acquire subsidiaries of REIT Subsidiary and REIT LLC (the “Equity Sale”), (b) REIT LLC will then merge with and into REIT Subsidiary, with REIT Subsidiary surviving the merger (the “First REIT Merger”), (c) REIT Subsidiary will then merge with and into the Partnership, with the Partnership surviving the merger (the “Second REIT Merger”), (d) Merger Sub II will then merge with and into the Partnership (the “First Partnership Merger”), with the Partnership surviving the First Partnership Merger and (e) the Partnership will then merge with and into Merger Sub (the “Second Partnership Merger” and, together with the Equity Sales, the First REIT Merger, Second REIT Merger and the First Partnership Merger, the “Transactions”), with Merger Sub surviving the Second Partnership Merger. As a result of the Transactions, the Common Units will be delisted from the NASDAQ Global Market.

Under the terms of the Transaction Agreement, at the effective time of the First Partnership Merger (the “First Partnership Merger Effective Time”), (a) each issued and outstanding common unit representing limited partner interests in the Partnership (“Common Units”), other than those Common Units owned by Landmark Dividend or its Affiliates (as defined below) (such Common Units, the “Landmark Dividend Common Units”), will be converted into the right to receive $16.50 per Common Unit in cash without any interest thereon (the “Partnership Unaffiliated Unitholders Consideration”); (b) each issued and outstanding Series A Preferred Unit (as defined in the Partnership Agreement) will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series A Preferred Unit in cash without any interest thereon; (c) each issued and outstanding Series B Preferred Unit (as defined in the Partnership Agreement) will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series B Preferred Unit in cash without any interest thereon and (d) each issued and outstanding Series C Preferred Unit (as defined in the Partnership Agreement) will be converted into the right to receive the greater of (1) $25.00 plus the amount of any accumulated and unpaid distributions per Series C Preferred Unit to, but not including, the date of the First Partnership Merger Effective Time plus the amount of any distributions that would have accrued from the date of the First Partnership Merger Effective Time to, but not including, the 50th Business Day following the First Partnership Merger Effective Time and (2) the sum of (i) the product of (x) the Alternative Conversion Amount (as defined in the Partnership Agreement) multiplied by (y) Partnership Unaffiliated Unitholders Consideration plus (ii) the amount of any accumulated and unpaid distributions for all prior Series C Distribution Periods (as defined in the Partnership Agreement) ending on or prior to the 20th Business Day following the First Partnership Merger Effective Time, per Series C Preferred Unit in cash without any interest thereon.

Pursuant to the Transaction Agreement and the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of April 2, 2018, as amended (the “Partnership Agreement”), holders of at least a majority of the issued and outstanding Common Units of the Partnership must affirmatively vote or consent in favor of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, in order for them to be approved (“Partnership Unitholder Approval”). Pursuant to the terms of the Transaction Agreement, each of Landmark Dividend and the Buyer Parties agreed to vote all Common Units then owned beneficially or of record by it or any of its subsidiaries in favor of the approval of the Transaction Agreement and the Transactions and Landmark Dividend and each of the Buyer Parties agreed not to, and to cause each of their subsidiaries not to, directly or indirectly, transfer, assign or otherwise dispose of any Common Units owned by Landmark Dividend, such Buyer Party or its subsidiaries, other than to any of their respective Affiliates so long as such Affiliates agree to be bound by such obligations to the same extent as the Buyer Parties and Landmark Dividend. Accordingly, the Partnership expects that all such Common Units held by Landmark Dividend and each of the Buyer Parties will be voted in favor of the approval of the Transaction Agreement and the Transactions at the special meeting (the “Partnership Unitholder Meeting”) of holders (the “Partnership Unitholders”) of Common Units. The Partnership has scheduled the Partnership Unitholder Meeting to vote on the Transaction Agreement and the Transactions on December 9, 2021 at 10:00 AM, Pacific Time, at 400 Continental Blvd., Suite 500, El Segundo, CA 90245. Regardless of the number of Common Units you own or whether you plan to attend the meeting, it is important that your Common Units be represented and voted at the meeting. Voting instructions are set forth inside this proxy statement.

A committee of the Board of Directors of the Partnership GP (the “Board”) consisting entirely of individuals that the Board determined satisfied the requirements set forth in the Partnership Agreement for service on a conflicts committee (the “Conflicts Committee”) has, by unanimous vote, in good faith, (a) determined that the Transaction Agreement and the consummation of the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the holders of Common Units other than the Partnership GP and its Affiliates (including the Buyer Parties and their Affiliates) (such holders, the “Partnership Unaffiliated Unitholders”), (b) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, which action constituted “Special Approval” as defined in the Partnership Agreement, and (c) recommended that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement and the consummation of the transactions contemplated thereby, including the Transactions. The Conflicts Committee consists of independent directors Keith Benson, Thomas Carey White III and Gerald A. Tywoniuk.

The Board, after considering various factors, including the unanimous determination and recommendation of the Conflicts Committee, has determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders and has approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions. Accordingly, the Board recommends that the holders of all Common Units (the “Unitholders”) vote “FOR” the Transactions Proposal.

This proxy statement provides you with detailed information about the proposed Transactions and related matters. The Partnership encourages you to read the entire document carefully. You may also obtain additional information about the Partnership from documents the Partnership has filed with the Securities and Exchange Commission.

The Common Units are listed on the NASDAQ Global Market under the symbol “LMRK.” The last reported sale price of the Common Units on the NASDAQ Global Market on October 25, 2021 as $16.40 per share.

Arthur P. Brazy, Jr.

Chief Executive Officer

Landmark Infrastructure Partners GP LLC

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTIONS, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The proxy statement is dated October 26, 2021 and is first being mailed or otherwise delivered to the Unitholders on or about October 29, 2021.

El Segundo, California

October 26, 2021

Notice of Special Meeting of Unitholders

To Be Held on December 9, 2021

To the Unitholders of Landmark Infrastructure Partners LP:

A special meeting (the “Partnership Unitholder Meeting”) of holders (the “Unitholders”) of common units representing limited partner interests (the “Common Units”) of Landmark Infrastructure Partners LP, a Delaware limited partnership (the “Partnership”), will be held on December 9, 2021 at 10:00 AM, Pacific Time, at 400 Continental Blvd., Suite 500, El Segundo, CA 90245, to consider and vote upon the approval of the Transaction Agreement (as it may be amended from time to time, the “Transaction Agreement”), dated as of August 21, 2021, by and among the Partnership, Landmark Infrastructure Partners GP LLC, a Delaware limited liability company (the “Partnership GP”), Landmark Infrastructure REIT LLC, a Delaware limited liability company (“REIT LLC”), Landmark Infrastructure Inc., a Delaware corporation (“REIT Subsidiary”, and together with the Partnership, the Partnership GP and REIT LLC, the “Partnership Parties”), LM DV Infrastructure, LLC, a Delaware limited liability company (“LM DV Infra”), LM Infra Acquisition Company, LLC, a Delaware limited liability company (“LM Infra”), Digital LD MergerCo LLC, a Delaware limited liability company (“Merger Sub”), Digital LD MergerCo II LLC, a Delaware limited liability company (“Merger Sub II”, and together with LM DV Infra, LM Infra and Merger Sub, the “Buyer Parties”), and, solely for purposes set forth therein, Landmark Dividend LLC, a Delaware limited liability company (“Landmark Dividend”), and the transactions contemplated thereby, including the following series of transactions: (a) LM DV Infra and its subsidiaries acquiring subsidiaries of REIT Subsidiary and REIT LLC (the “Equity Sale”), (b) REIT LLC then merging with and into REIT Subsidiary, with REIT Subsidiary surviving the merger (the “First REIT Merger”), (c) REIT Subsidiary then merging with and into the Partnership, with the Partnership surviving the merger (the “Second REIT Merger”), (d) Merger Sub II then merging with and into the Partnership (the “First Partnership Merger”), with the Partnership surviving the First Partnership Merger and (e) the Partnership then merging with and into Merger Sub (the “Second Partnership Merger” and, together with the Equity Sales, the First REIT Merger, Second REIT Merger and the First Partnership Merger, the “Transactions”), with Merger Sub surviving the Second Partnership Merger (such transactions, collectively, the “Transactions”) (such proposal, the “Transactions Proposal”).

The Partnership will transact no other business at the Partnership Unitholder Meeting except such business as may properly be brought before the Partnership Unitholder Meeting or any adjournments or postponements thereof. At this time, the Partnership knows of no other matters that will be presented for the consideration of the Unitholders at the Partnership Unitholder Meeting.

Pursuant to the Transaction Agreement and the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of April 2, 2018, as amended (the “Partnership Agreement”), holders of at least a majority of the issued and outstanding Common Units of the Partnership must affirmatively vote or consent in favor of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, in order for them to be approved (“Partnership Unitholder Approval”). Failures to vote, abstentions and broker non-votes will have the same effect as a vote against the Transactions Proposal for purposes of the vote by Unitholders required under the Transaction Agreement and the Partnership Agreement.

A committee of the Board of Directors of the Partnership GP (the “Board”) consisting entirely of individuals that the Board determined satisfied the requirements set forth in the Partnership Agreement for service on a conflicts committee (the “Conflicts Committee”) has, by unanimous vote, in good faith, (a) determined that the Transaction Agreement and the consummation of the transactions contemplated thereby, including the

Transactions, are in the best interests of the Partnership, including the holders of Common Units other than the Partnership GP and its Affiliates (including the Buyer Parties and their Affiliates) (such holders, the “Partnership Unaffiliated Unitholders”), (b) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, which action constituted “Special Approval” as defined in the Partnership Agreement, and (c) recommended that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement and the consummation of the transactions contemplated thereby, including the Transactions.

The Board, after considering various factors, including the unanimous determination and recommendation of the Conflicts Committee, has determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders and has approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions. Accordingly, the Board recommends that the Unitholders vote “FOR” the Transactions Proposal.

Only Unitholders of record at the close of business on October 25, 2021 are entitled to notice of and to vote at the Partnership Unitholder Meeting and any adjournments or postponements of the Partnership Unitholder Meeting. A list of Unitholders entitled to vote at the meeting will be available for inspection at the Partnership’s offices in El Segundo, California for any purposes relevant to the meeting during normal business hours for a period of ten days before the meeting and at the meeting.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY IN ONE OF THE FOLLOWING WAYS.

If you hold your Common Units in the name of a bank, broker or other nominee, you should follow the instructions provided by your bank, broker or nominee when submitting instructions to cause your Common Units to be voted. If you hold your Common Units in your own name, you may submit your proxy by:

 

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using the toll-free telephone number shown on the proxy card;

 

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using the Internet website shown on the proxy card; or

 

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marking signing, dating and promptly returning the enclosed proxy card in the postage-paid envelope. It requires no postage if mailed in the United States.

Submitting a proxy now will not limit your right to vote at the Partnership Unitholder Meeting if you decide to attend in person. If you plan to attend the Partnership Unitholder Meeting and wish to vote in person, you will be given a ballot at the Partnership Unitholder Meeting.

By order of the Board of Directors of Landmark Infrastructure Partners GP LLC, as the general partner of Landmark Infrastructure Partners LP.

Arthur P. Brazy, Jr.

Chief Executive Officer

Landmark Infrastructure Partners GP LLC

IMPORTANT NOTE ABOUT THIS PROXY STATEMENT

This proxy statement constitutes a proxy statement of Landmark Infrastructure Partners LP, a Delaware limited partnership (the “Partnership”), under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the solicitation of proxies for the special meeting (the “Partnership Unitholder Meeting”) of holders (the “Partnership Unitholders”) of common units representing limited partner interests (the “Common Units”) of the Partnership to, among other things, approve the Transaction Agreement (as defined below in “Summary Term Sheet—The Transactions”) and the Transactions (as defined below in “Summary Term Sheet—The Transactions”).

As permitted under the rules of the Securities and Exchange Commission (the “SEC”), this proxy statement incorporates by reference important business and financial information about the Partnership from other documents filed with the SEC that are not included in or delivered with this proxy statement. Please read “Where You Can Find More Information” beginning on page 106. You can obtain any of the documents incorporated by reference into this document from the SEC’s website at http://www.sec.gov. This information is also available to you without charge upon your request in writing or by telephone from the Partnership at the following address and telephone number:

Landmark Infrastructure Partners LP

400 Continental Blvd., Suite 500

El Segundo, California 90245

Attention: Investor Relations

Telephone: (213) 788-4528

Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents or this proxy statement.

You may obtain certain of these documents at the Partnership’s website, www.landmarkmlp.com, by selecting “Investors” and then selecting “Financial Information.” Information contained on the Partnership’s website is expressly not incorporated by reference into this proxy statement.

In order to receive timely delivery of requested documents in advance of the Partnership Unitholder Meeting, your request should be received no later than December 2, 2021. If you request any documents, the Partnership will mail them to you by first class mail, or another equally prompt means, after receipt of your request.

The Partnership has not authorized anyone to give any information or make any representation about the Transactions or the Partnership that is different from, or in addition to, that contained in this proxy statement or in any of the materials that have been incorporated by reference into this proxy statement. Therefore, you should not rely on any information you receive about the Transactions that is not contained in this proxy statement or in any of the materials that have been incorporated by reference into this proxy statement. If you are in a jurisdiction where the solicitation of proxies is unlawful, or you are a person to whom it is unlawful to direct the solicitation of proxies, then the solicitation presented in this proxy statement does not extend to you. The information contained in this proxy statement speaks only as of the date of this proxy statement, or in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. You may also obtain additional information about the Partnership from documents the Partnership has filed with the SEC.

TABLE OF CONTENTS

 

		Page
SUMMARY TERM SHEET			1
QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS AND THE PARTNERSHIP UNITHOLDER MEETING			9
THE TRANSACTIONS			16
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			55
INFORMATION ABOUT THE PARTNERSHIP UNITHOLDER MEETING AND VOTING			57
THE TRANSACTIONS PROPOSAL			60
POSTPONEMENT OR ADJOURNMENT			61
OTHER MATTERS			62
THE TRANSACTION AGREEMENT			63
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES			80
INFORMATION CONCERNING THE PARTNERSHIP			85
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA			90
MARKET PRICE AND CASH DISTRIBUTION INFORMATION			95
INFORMATION CONCERNING THE BUYER PARTIES AND LANDMARK DIVIDEND			99
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT, LANDMARK DIVIDEND AND THE BUYER PARTIES			101
CERTAIN PURCHASES AND SALES OF COMMON UNITS OR PREFERRED UNITS			103
DELISTING AND DEREGISTRATION OF COMMON UNITS AND THE PREFERRED UNITS			104
UNITHOLDER PROPOSALS			105
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			106
WHERE YOU CAN FIND MORE INFORMATION			106
ANNEX A: THE TRANSACTION AGREEMENT			A-1
ANNEX B: OPINION OF EVERCORE GROUP L.L.C.			B-1

 

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SUMMARY TERM SHEET

This proxy statement, along with a form of proxy, is first being mailed to each Unitholder on or about October 29, 2021. The following summary highlights some of the information in this proxy statement and may not contain all of the information that may be important to you. Accordingly, the Partnership encourages you to read carefully this entire proxy statement and the documents incorporated by reference in this proxy statement. You may obtain information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” on page 106.

Parties to the Transactions

Landmark Infrastructure Partners LP

The Partnership, a Delaware limited partnership, is a publicly traded limited partnership that acquires, develops, owns and manages a portfolio of real property interests and infrastructure assets that are leased to companies in the wireless communication, digital infrastructure, outdoor advertising and renewable power generation industries. The Partnership holds substantially all of its assets in a consolidated subsidiary, Landmark Infrastructure, Inc., a Delaware corporation (“REIT Subsidiary”).

The Partnership’s portfolio of property interests consists primarily of (a) long-term and perpetual easements combined with lease assignment contracts (“Lease Assignments”), (b) Lease Assignments without easements, (c) properties owned in fee simple and (d) infrastructure owned and leased to the Partnership’s tenants. In connection with each real property interest, the Partnership has also acquired the rights to receive payment under pre-existing ground leases from property owners (“Tenant Leases”). Under the Partnership’s easements, property owners have granted the Partnership the right to use and lease the space occupied by the Partnership’s tenants, and when the Partnership has not been granted easements, it has acquired economic rights under lease assignments that are substantially similar to the economic rights granted under its easements, including the right to re-lease the same space if the Tenant Lease expires or terminates.

The Common Units representing limited partner interests in the Partnership are listed on the NASDAQ Global Market under the symbol “LMRK”. As of October 25, 2021, there were 25,488,992 Common Units issued and outstanding. The Series A Preferred Units (as defined in the Partnership Agreement) are listed on the NASDAQ Global Market under the symbol “LMRKP”. As of October 25, 2021, there were 1,788,843 Series A Preferred Units issued and outstanding. The Series B Preferred Units (as defined in the Partnership Agreement) are listed on the NASDAQ Global Market under the symbol “LMRKO”. As of October 25, 2021, there were 2,628,932 Series B Preferred Units issued and outstanding. The Series C Preferred Units (as defined in the Partnership Agreement, and together with the Series A Preferred Units and the Series B Preferred Units, the “Preferred Units”) are listed on the NASDAQ Global Market under the symbol “LMRKN”. As of October 25, 2021, there were 1,982,700 Series C Preferred Units issued and outstanding.

Landmark Infrastructure Partners GP LLC

Landmark Infrastructure Partners GP LLC (“Partnership GP”) is a Delaware limited liability company and is the general partner of the Partnership. The Partnership GP is owned by Landmark Dividend LLC (“Landmark Dividend”), the sponsor of the Partnership, and is responsible for conducting the Partnership’s business and managing its operations.

Landmark Infrastructure, Inc.

REIT Subsidiary is a Delaware corporation, which elected to be taxed as a real estate investment trust under the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2017. The Partnership holds substantially all of its assets in REIT Subsidiary.

 

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Landmark Infrastructure, Inc., and Landmark Infrastructure REIT LLC

Landmark Infrastructure REIT LLC, a Delaware limited liability company (“REIT LLC” and, together with the Partnership, the Partnership GP, REIT Subsidiary and the LMRK Companies, the “Partnership Parties”) is a subsidiary of REIT Subsidiary.

The principal executive offices of the Partnership Parties are located at 400 Continental Blvd., Suite 500, El Segundo, CA 90245, and their telephone number is (310) 598-3173.

LM Infra Acquisition Company, LLC

LM Infra Acquisition Company, LLC (“LM Infra”), is a Delaware limited liability company and the sole member of Merger Sub. LM Infra is an affiliate of Landmark Dividend.

LM DV Infrastructure, LLC

LM DV Infrastructure, LLC (“LM DV Infra”), is a Delaware limited liability company and is a wholly owned subsidiary of LM Infra.

The principal executive offices of LM Infra and LM DV Infra are located at 400 Continental Blvd., Suite 500, El Segundo, CA 90245, and its telephone number is (310) 598-3173.

Digital LD MergerCo LLC

Digital LD MergerCo LLC (“Merger Sub”), is a Delaware limited liability company and is a wholly owned subsidiary of LM Infra. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Transaction Agreement. Pursuant to the terms of the Transaction Agreement, the Partnership will be merged with and into Merger Sub, with Merger Sub surviving the merger and continuing to exist as a Delaware limited liability company.

Digital LD MergerCo II LLC

Digital LD MergerCo II LLC (“Merger Sub II”, and together with LM Infra, LM DV Infra and Merger Sub, the “Buyer Parties”), is a Delaware limited liability company and is a wholly owned subsidiary of Merger Sub. Merger Sub II has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Transaction Agreement. Pursuant to the terms of the Transaction Agreement, Merger Sub II will be merged with and into the Partnership, with the Partnership surviving the merger and continuing to exist as a Delaware limited partnership until the Second Partnership Merger (as defined below).

The principal executive offices of Merger Sub and Merger Sub II are located 750 Park of Commerce Drive, Suite 210, Boca Raton, Florida 33487, and its telephone number is (561) 544-7475.

Landmark Dividend LLC

Landmark Dividend is a Delaware limited liability company and the sponsor of the Partnership and the sole member of the Partnership GP.

The principal executive offices of Landmark Dividend are located at 400 Continental Blvd., Suite 500, El Segundo, CA 90245, and its telephone number is (310) 598-3173.

 

2

Relationship of the Parties to the Transactions

The Buyer Parties are affiliates of Landmark Dividend. Landmark Dividend is the sole member of the Partnership GP.

Landmark Dividend owns, in the aggregate, (a) 5,066,408 Common Units, which represents approximately 19.9% of the total outstanding Common Units as of June 30, 2021, (b) all of the General Partner Interests (as defined in the Partnership Agreement) and (c) all of the Incentive Distribution Rights (as defined in the Partnership Agreement). Landmark Dividend also owns 100% of the membership interests in the Partnership GP. Landmark Dividend does not own any of the Preferred Units. Subject to certain limitations in the Transaction Agreement with respect to members of the Conflicts Committee, Landmark Dividend has the right to appoint and remove all of the members of the Partnership GP board of directors. Thus, Landmark Dividend has a controlling interest in the Partnership GP, which manages the operations and activities of the Partnership.

For additional information, see “The Transactions—Interests of Certain Persons in the Transactions” and “Information Concerning the Buyer Parties and Landmark Dividend.”

The Transactions

Pursuant to the Transaction Agreement, dated as of August 21, 2021 (the “Transaction Agreement”), by and among LM DV Infra, LM Infra, Merger Sub, Merger Sub II, REIT LLC, REIT Subsidiary, the Partnership, the Partnership GP and Landmark Dividend (solely for the purposes set forth in the Transaction Agreement), LM Infra will acquire all of the assets of the Partnership through the following series of transactions: (a) LM DV Infra will acquire the LMRK Companies from REIT LLC and REIT Subsidiary (the “Equity Sale”), (b) REIT LLC will then merge with and into REIT Subsidiary, with REIT Subsidiary surviving the merger (the “First REIT Merger”), (c) REIT Subsidiary will then merge with and into the Partnership, with the Partnership surviving the merger (the “Second REIT Merger”), (d) Merger Sub II will then merge with and into the Partnership (the “First Partnership Merger”), with the Partnership surviving the First Partnership Merger and (e) the Partnership will then merge with and into Merger Sub (the “Second Partnership Merger” and, together with the Equity Sales, the First REIT Merger, Second REIT Merger and the First Partnership Merger, the “Transactions”), with Merger Sub surviving the Second Partnership Merger. As a result of the Transactions, the Common Units will be delisted from the NASDAQ Global Market.

A copy of the Transaction Agreement is attached as Annex A to this proxy statement and is incorporated herein by reference. You should read carefully the Transaction Agreement in its entirety because it, and not this proxy statement, is the legal document that governs the terms of the transactions contemplated by the Transaction Agreement, including the Transactions.

For additional information, see “The Transactions.”

The Transactions Consideration

Under the terms of the Transaction Agreement, at the effective time of the First Partnership Merger (the “First Partnership Merger Effective Time”), (a) each issued and outstanding Common Unit, other than those Common Units owned by Landmark Dividend or its affiliates (such Common Units, the “Landmark Dividend Common Units”), will be converted into the right to receive $16.50 per Common Unit in cash without any interest thereon (the “Partnership Unaffiliated Unitholders Consideration”); (b) each issued and outstanding Series A Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series A Preferred Unit in cash without any interest thereon (the “Series A Liquidation Preference”); (c) each issued and outstanding Series B Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series B Preferred Unit in cash without any interest thereon (the “Series B Liquidation Preference”) and (d) each issued and outstanding

 

3

Series C Preferred Unit will be converted into the right to receive the greater of (1) $25.00 plus the amount of any accumulated and unpaid distributions per Series C Preferred Unit to, but not including, the date of the First Partnership Merger Effective Time plus the amount of any distributions that would have accrued from the date of the First Partnership Merger Effective Time to, but not including, the 50th business day following the First Partnership Merger Effective Time and (2) the sum of (i) the product of (x) the Alternative Conversion Amount (as defined in the Partnership Agreement) multiplied by (y) Partnership Unaffiliated Unitholders Consideration plus (ii) the amount of any accumulated and unpaid distributions for all prior Series C Distribution Periods (as defined in the Partnership Agreement) ending on or prior to the 20th business day following the First Partnership Merger Effective Time, per Series C Preferred Unit in cash without any interest thereon (the “Series C Fundamental Change Redemption Price” and, together with the Series A Liquidation Preference and the Series B Liquidation Preference, the “Preferred Units Consideration”).

At the effective time of the Second Partnership Merger, each issued and outstanding Landmark Dividend Common Unit and all Incentive Distribution Rights will be converted into the right for Landmark Dividend or its affiliates to receive a certain promissory note in an amount specified by LM DV Infra (the “Equity Sales Note”) and the General Partner Interest will be cancelled and retired and will cease to exist. No consideration will be delivered for such cancelled General Partner Interest.

For additional information regarding the terms of the Transactions Consideration, see “The Transaction Agreement—The Transactions Consideration.”

Effects of the Transactions

If the Transactions are completed, (a) all of the assets of the Partnership Parties will be owned by LM Infra, (b) the holders of Common Units and Preferred Units will no longer have an equity interest in the Partnership, (c) the Common Units and the Preferred Units will no longer be listed on the NASDAQ Global Market and cease to exist and (d) the registration of the Common Units and the Preferred Units under the Exchange Act will be terminated.

For additional information, see “The Transactions—Effects of the Transactions.”

Reasons for the Conflicts Committee’s Recommendation

By vote at a meeting of the Conflicts Committee on August 21, 2021, the Conflicts Committee unanimously (a) determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the Partnership Unaffiliated Unitholders, (b) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, such approval constituting “Special Approval” of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, for all purposes under the Partnership Agreement, and (c) recommended that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement, and the consummation of the transactions contemplated thereby, including the Transactions. In evaluating the Transaction Agreement and the transactions contemplated thereby, the Conflicts Committee considered information supplied by DigitalBridge and the management of the Partnership GP and Landmark Dividend (the “Management”), consulted with its legal and financial advisors, and considered a number of factors in reaching its determination, approval and recommendation.

For a more complete discussion of these items, see “The Transactions—Reasons for the Conflicts Committee’s Recommendation.”

Reasons for the Board’s Recommendation

The Board, after considering various factors, including the unanimous determination and recommendation of the Conflicts Committee, has determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders and has approved the Transaction Agreement and the transactions contemplated thereby, including

 

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the Transactions. Accordingly, the Board recommends that the holders of all Common Units (the “Unitholders”) vote “FOR” the Transactions Proposal.

For a more complete discussion of these items, see “The Transactions—Reasons for the Board’s Recommendation.”

Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee

In connection with the proposed Transactions, Evercore delivered a written opinion, dated as of August 21, 2021, to the Conflicts Committee, as to the fairness, from a financial point of view and as of the date of the opinion, of the Partnership Unaffiliated Unitholders Consideration to be received by the Partnership Unaffiliated Unitholders. In such written opinion, Evercore confirmed its oral opinion that, as of August 21, 2021, based upon and subject to the assumptions, procedures, qualifications, limitations and other matters considered by Evercore in connection with the preparation of its opinion, the merger consideration to be received by the Partnership Unaffiliated Common Unitholders in the First Partnership Merger is fair, from a financial point of view, to the Partnership Unaffiliated Common Unitholders. The full text of the written opinion of Evercore, dated as of August 21, 2021, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached hereto as Annex B to this proxy statement. You are urged to read Evercore’s opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Conflicts Committee in connection with its evaluation of the fairness of the Partnership Unaffiliated Unitholders Consideration, from a financial point of view, to the Partnership Unaffiliated Unitholders, and did not address any other aspects or implications of the Transactions. Evercore’s opinion should not be construed as creating any fiduciary duty on Evercore’s part to any party and such opinion was not intended to be, and does not constitute, a recommendation to the Conflicts Committee or to any other persons in respect of the Transactions, including as to how any unitholder of the Partnership should act in respect of the Transactions. The summary of the Evercore opinion set forth herein is qualified in its entirety by reference to the full text of the opinion included as Annex B to this proxy statement.

For a description of the opinion that the Conflicts Committee received from Evercore, see “The Transactions—Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee.”

Interests of Certain Persons in the Transactions

In considering the recommendation of the Conflicts Committee with respect to the Transaction Proposal, the Unitholders holding Common Units should be aware that certain of the executive officers and directors of the Partnership GP have interests in the transaction that differ from, or are in addition to, the interests of the holders of Common Units generally. For a complete discussion of these and other items, see “The Transactions—Interests of Certain Persons in the Transactions.”

The Transaction Agreement

The Transaction Agreement is attached to this proxy statement as Annex A and is incorporated by reference into this proxy statement. You are encouraged to read the Transaction Agreement in its entirety because it is the legal document that governs the Transactions.

Conditions to the Transactions

The respective obligations of the Partnership Parties and the Buyer Parties to effect the Transactions are subject to the satisfaction or, to the extent permitted by applicable law, waiver, of certain customary conditions, including the Partnership Unitholder Approval being obtained, the absence of any legal prohibition on the consummation of the Transactions, the accuracy of the representations and warranties of the parties, compliance in all material respects with their respective obligations under the Transaction Agreement, and, with respect to the obligations of LM DV Infra, the absence of a Partnership Material Adverse Effect.

 

 

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Termination

The Transaction Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing Date:

 

•

by the mutual written consent of the Partnership and LM Infra;

 

•

by either of the Partnership or LM Infra:

 

•

if there is any legal prohibition on the consummation of the Transactions, except that the right to terminate the Transaction Agreement on this basis shall not be available to the Partnership or LM Infra, as applicable, if the legal prohibition was primarily due to the failure of, in the case of the Partnership, any Partnership Party, and in the case of LM Infra, any Buyer Party, to perform in all material respects any of its obligations under the Transaction Agreement;

 

•

if the Closing has not been consummated on or before February 21, 2022 (as may be extended in accordance with the Transaction Agreement for a period of up to 90 days by either the Partnership or LM Infra by delivering written notice to the other parties prior to such date in the event that any Required Approval shall have not been obtained prior to such date, the “Outside Date”), except that the right to terminate the Transaction Agreement on this basis shall not be available to the Partnership or LM Infra, as applicable, if the failure of the Closing to occur by the Outside Date was primarily due to the failure of, in the case of the Partnership, any Partnership Party, and in the case of LM Infra, any Buyer Party, to perform and comply in all material respects with the covenants and agreements to be performed or complied with by it prior to the Closing Date;

 

•

if the Partnership Unitholder Meeting has concluded and the Partnership Unitholder Approval has not been obtained; or

 

•

if the other party has breached any of its representations or warranties, or failed to perform any of its covenants or agreements, in any way that results in the failure to satisfy a condition to Closing, and such breach has not been cured within the earlier of (i) 30 days following receipt of written notice of such breach or failure or (ii) the Outside Date; provided that the party seeking to terminate is not then in material breach of its own obligations.

 

•

by LM Infra, if:

 

•

a Partnership Adverse Recommendation Change has occurred, unless the Partnership Unitholder Approval has occurred.

 

•

by the Partnership, if:

 

•

(a) all of the closing conditions set forth in the Transaction Agreement (other than such conditions relating to the representations, warranties, covenants or agreements of LM Infra with respect to the obligation of REIT Subsidiary and REIT LLC to effect the Equity Sales) were and continue to be satisfied (other than such conditions that by their nature are to be satisfied at the Closing, but subject to such conditions being capable of satisfaction), and Closing has not occurred by the time required by the Transaction Agreement, (b) the Partnership GP has delivered a Closing Failure Notice (as defined in “The Transaction Agreement—Termination” ) to LM Infra, and (c) the Buyer Parties fail to consummate the Transactions within such five business day period after the date of the delivery of a Closing Failure Notice.

Termination Fees

If the Transaction Agreement is terminated by LM Infra in connection with a Partnership Adverse Recommendation Change or is terminated by the Partnership or LM Infra if the Closing has not been consummated on or before the Outside Date at a time when LM Infra could have terminated the Transaction

 

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Agreement in connection with a Partnership Adverse Recommendation Change, the Partnership will promptly, but in no event later than ten business days after the date of such termination, pay to LM Infra or its designee a termination fee in an amount equal to $7.30 million. If the Transaction Agreement is terminated by the Partnership following a Closing Failure Notice or is terminated by the Partnership or LM Infra if the Closing has not been consummated on or before the Outside Date at a time when the Partnership could have terminated the Transaction Agreement following a Closing Failure Notice, Landmark Dividend or its designee will promptly, but in no event later than ten business days after the date of such termination, pay or cause to be paid to the Partnership a termination fee in an amount equal to $18.25 million.

Effect of Termination; Remedies

In the event of termination of the Transaction Agreement in accordance with the provisions described above in “—Termination,” the Transaction Agreement (other than the provisions described above in “—Termination Fees” and certain other specific sections of the Transaction Agreement) will become null and void and of no further force and effect, and each of the parties shall be relieved of their duties and obligations arising under the Transaction Agreement after the date of such termination and the parties will have no further liability under the Transaction Agreement, except that the parties will continue to be liable for fraud or willful breach of the Transaction Agreement.

For more information regarding the effect of termination and remedies, see “The Transaction Agreement—Effect of Termination; Remedies” and “The Transaction Agreement—Specific Performance; Remedies.” For more information regarding the terms of the Transaction Agreement, see “The Transaction Agreement.”

Expenses Relating to the Transactions

Under the terms of the Transaction Agreement, except for any termination fees described in “The Transaction Agreement—Termination Fees” and certain expenses related to the debt financing described below, all fees and expenses incurred in connection with the transactions contemplated by the Transaction Agreement and its ancillary documents shall be the obligation of the respective party incurring such fees and expenses.

For more information regarding the parties’ expenses, see “The Transactions—Estimated Fees and Expenses.”

Financing of the Transactions

Concurrently with the execution of the Transaction Agreement, LM DV Infra entered into a debt commitment letter (the “Debt Commitment Letter”) with Truist Bank, Truist Securities, Inc., Citizens Bank, N.A., Royal Bank of Canada, RBC Capital Markets, LLC, The Toronto Dominion Bank, New York Branch and TD Securities (USA) LLC (collectively, the “Financing Banks”), pursuant to which the Financing Banks committed, subject to the terms and conditions set forth therein, to provide debt financing in an aggregate principal amount of up to $500 million to, among other uses, fund a portion of the Transactions Consideration.

In addition, concurrently with the execution of the Transaction Agreement, the Buyer Parties entered into an Equity Commitment Letter (the “Equity Commitment Letter” and together with the Debt Commitment Letter, the “Commitment Letters”), dated August 21, 2021, with Digital Colony Partners II, LP (the “Equity Investor”), pursuant to which the Equity Investor has agreed to directly or indirectly, contribute proceeds to LM DV Infra for an aggregate amount of $510 million, solely for the purposes of financing the transactions contemplated by the Transaction Agreement, including the payment of a portion of the Transactions Consideration.

The Buyer Parties have represented to the Partnership Parties that the aggregate proceeds contemplated by the Commitment Letters will be sufficient to consummate the Transactions and the related transactions, including payment of the Transactions Consideration and any fees and expenses of or payable by the Buyer Parties under the Transaction Agreement and the Commitment Letters that are due and payable on the Closing Date (the “Required Amount”). The Buyer Parties’ obligation to close the Transactions is not conditioned on its ability to obtain financing.

 

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For additional information, see “The Transactions—Financing of the Transactions.”

Certain Material United States Federal Income Tax Consequences

In general, the Second REIT Merger will be treated as a taxable event by the Partnership. The First Partnership Merger combined with the Second Partnership Merger will be part of a plan of liquidation of the Partnership where holders of Common Units will receive distributions of cash in liquidation of their Common Units. The Second REIT Merger and/or the distribution of cash to holders of Common Units in the First Partnership Merger may subject holders of Common Units to United States federal income tax depending on such holder’s own tax situation. Accordingly, you are strongly urged to consult your own tax advisor for a full understanding of the particular tax consequences of the Transactions to you.

Please read “Certain Material United States Federal Income Tax Consequences” for a more complete discussion of certain material United States federal income tax consequences to holders of Common Units of the Second REIT Merger and the receipt of cash by such holders in the First Partnership Merger.

No Dissenters’ or Appraisal Rights for the Unitholders or Holders of Preferred Units

Under the Transaction Agreement, there are no dissenters’ or appraisal rights for the Unitholders or holders of Preferred Units with respect to the Transactions.

For additional information, see “The Transactions—No Dissenters’ or Appraisal Rights.”

Regulatory Approvals Required for the Transactions

In connection with the Transactions, the Partnership intends to make all required filings under the Exchange Act, as well as any required filings with NASDAQ Global Market and the Secretary of State of the State of Delaware. The Partnership also made all required filings under section 81 of the Commonwealth of Australia’s Foreign Acquisitions and Takeovers Act 1976, and intends to make any required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if required, and will abide by any applicable waiting periods with respect thereto.

For additional information, see “The Transaction Agreement—The Transactions.”

Accounting Treatment

The Transactions will be accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification. As the Partnership and the Buyer Parties are under common control, the Transactions will be accounted for as equity transactions and no gain or loss on the Transactions will be recognized in the Partnership’s consolidated statements of operations.

For additional information, see “The Transactions —Accounting Treatment.”

Delisting and Deregistration of Common Units and Preferred Units

Upon completion of the Transactions, the Common Units and Preferred Units currently listed on the NASDAQ Global Market will cease to be listed on the NASDAQ Global Market and will be subsequently deregistered under the Exchange Act.

 

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS AND THE PARTNERSHIP UNITHOLDER MEETING

Important Information and Risks. The following are brief answers to some questions that you may have regarding the Transactions Proposal and the Partnership Unitholder Meeting. You should read and consider carefully the remainder of this proxy statement because the information in this section does not provide all of the information that might be important to you. Additional important information and descriptions of risk factors are also contained in the documents incorporated by reference into this proxy statement. Please read “Where You Can Find More Information” beginning on page 106.

 

Q:	WHY AM I RECEIVING THESE MATERIALS?

 

A:

The Partnership Parties, together with the Buyer Parties and Landmark Dividend have entered into the Transaction Agreement, pursuant to which LM Infra will acquire all of the assets of the Partnership and as a result of the Transactions contemplated by the Transaction Agreement, the Common Units and the Preferred Units will be delisted from the NASDAQ Global Market. The Transactions cannot be completed without the approval or consent of at least a majority of the issued and outstanding Common Units. The Partnership GP is sending this proxy statement in connection with its solicitation of your proxy for use at the Partnership Unitholder Meeting because you owned Common Units at the close of business on October 25, 2021, the record date for the Partnership Unitholder Meeting, and therefore, are entitled to vote at the Partnership Unitholder Meeting.

Preferred Unitholders are receiving this proxy statement as information only.

 

Q:	ON WHAT AM I BEING ASKED TO VOTE?

 

A:	You are being asked to consider and vote on the Transactions Proposal.

 

Q:	WHAT IS THE TRANSACTIONS PROPOSAL?

 

A:

On August 21, 2021, the Partnership Parties, together with the Buyer Parties and Landmark Dividend entered into the Transaction Agreement, pursuant to which LM Infra will acquire all of the assets of the Partnership and as result of the Transactions contemplated by the Transaction Agreement, the Common Units and the Preferred Units will be delisted from the NASDAQ Global Market.

You are being asked to approve the Transaction Agreement, a copy of which is attached as Annex A to this proxy statement, as such agreement may be amended from time to time, and the Transactions.

 

Q:	WHAT WILL I, AS A HOLDER OF COMMON UNITS OR A HOLDER OF PREFERRED UNITS, RECEIVE IF THE TRANSACTIONS ARE COMPLETED?

 

A:	Upon completion of the Transactions, you will be entitled to receive in respect of each Common Unit, other than Landmark Dividend Common Units, held by you immediately prior to the First Partnership Merger Effective Time, $16.50 per Common Unit in cash without any interest thereon.

Under the terms of the Transaction Agreement, at the First Partnership Merger Effective Time, (a) each issued and outstanding Series A Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series A Preferred Unit in cash without any interest thereon, (b) each issued and outstanding Series B Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series B Preferred Unit in cash without any interest thereon and (c) each issued and outstanding Series C Preferred Unit will be converted into the right to receive the greater of (1) $25.00 plus the amount of any accumulated and unpaid distributions per Series C Preferred Unit to, but not including, the date of the First Partnership Merger Effective Time plus the amount of

 

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any distributions that would have accrued from the date of the First Partnership Merger Effective Time to, but not including, the 50th Business Day following the First Partnership Merger Effective Time and (2) the sum of (i) the product of (x) the Alternative Conversion Amount multiplied by (y) Partnership Unaffiliated Unitholders Consideration plus (ii) the amount of any accumulated and unpaid distributions for all prior Series C Distribution ending on or prior to the 20th Business Day following the First Partnership Merger Effective Time, per Series C Preferred Unit in cash without any interest thereon.

For additional information, see “The Transaction Agreement—The Transactions Consideration.”

 

Q:	WILL QUARTERLY DISTRIBUTIONS BE PAID PENDING THE CONSUMMATION OF THE TRANSACTIONS?

 

A:

Yes. Under the Transaction Agreement, the Partnership GP shall, subject to the requirements of the Partnership Agreement and the limitations of applicable law, cause the Partnership to declare and pay regular quarterly cash dividends of $0.20 per Common Unit to the holders of the Common Units with declaration, record and payment dates consistent with past practice. Under the Transaction Agreement, the Partnership is permitted to declare and pay distributions as required by the terms of the Series A Preferred Units, Series B Preferred Units and Series C Preferred Units.

 

Q:	HOW DOES THE $16.50 PER COMMON UNIT PARTNERSHIP UNAFFILIATED UNITHOLDERS CONSIDERATION COMPARE TO THE MARKET PRICE OF COMMON UNITS PRIOR TO THE EXECUTION OF THE TRANSACTION AGREEMENT?

 

A:

The $16.50 per Common Unit Partnership Unaffiliated Unitholders Consideration represents a premium of approximately (1) 38% to the $11.92 unaffected closing price on May 14, 2021, the last business day prior to the announcement of Landmark Dividend’s proposed acquisition of the Partnership for $13.00 per Common Unit and (2) 16.5% to the $14.16 closing price per Common Unit on August 20, 2021, the last trading day before the announcement of the Transactions.

 

Q:	WHERE AND WHEN IS THE PARTNERSHIP UNITHOLDER MEETING?

 

A:	The Partnership Unitholder Meeting will be held on December 9, 2021 at 10:00 AM, Pacific Time, at 400 Continental Blvd., Suite 500, El Segundo, CA 90245.

 

Q:	HOW DOES THE BOARD RECOMMEND THAT I VOTE?

 

A.

The Board, after considering various factors, including the unanimous determination and recommendation of the Conflicts Committee, has determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders and has approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions.

Accordingly, the Board recommends that the Unitholders vote “FOR” the Transactions Proposal.

For additional information, see “The Transactions—Reasons for the Board’s Recommendation.”

 

Q:	WHAT CONSTITUTES A QUORUM?

 

A:

The presence, in person or by proxy, at the Partnership Unitholder Meeting of holders of a majority of the Common Units entitled to vote at the Partnership Unitholder Meeting, as of the record date, will constitute a quorum and will permit the Partnership to conduct the proposed business at the Partnership Unitholder Meeting. Your shares will be counted as present at the Partnership Unitholder Meeting if you:

 

•

are present in person at the Partnership Unitholder Meeting; or

 

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•

have submitted and not revoked a properly executed proxy card or properly submitted and not revoked your proxy via telephone or the Internet.

Proxies received but marked as abstentions will be counted as Common Units that are present for purposes of determining the presence of a quorum. A broker non-vote will also be considered present at the Partnership Unitholder Meeting for purposes of determining the presence of a quorum. Abstentions and broker non-votes have the same effect as a vote against the Transactions for purposes of the vote required under the Transactions Agreement and the Partnership Agreement.

 

Q:	WHAT IS A PROXY?

 

A:

A proxy is your legal designation of another person, referred to as a “proxy,” to vote your Common Units. The written document describing the matters to be considered and voted on at the Partnership Unitholder Meeting is called a “proxy statement.” A “proxy card” is a document used to designate a proxy to vote your Common Units.

For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	IF A UNITHOLDER GIVES A PROXY, HOW ARE ITS COMMON UNITS VOTED?

 

A:

Regardless of how you choose to vote, the individuals named on the enclosed proxy card will vote your Common Units in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your Common Units should be voted “FOR” or “AGAINST,” or whether you wish to “ABSTAIN” from voting, on the specific item of business to come before the Partnership Unitholder Meeting.

If you own Common Units that are directly registered in your name with the transfer agent and return a signed proxy card or submit your proxy via the Internet or by telephone but do not indicate how you wish your Common Units to be voted, Common Units represented by your properly submitted proxy card will be voted “FOR” the Transactions Proposal.

For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	WHAT CAN I DO IF I CHANGE MY MIND AFTER I HAVE SUBMITTED A PROXY FOR MY COMMON UNITS?

 

A:	If your Common Units are registered directly in your name with the transfer agent, you may revoke your proxy at any time before it is voted at the Partnership Unitholder Meeting by:

 

•

submitting a proxy again prior to the Partnership Unitholder Meeting through any of the methods available to you;

 

•

giving written notice of revocation to the general counsel of the Partnership GP, which must be received by the general counsel of the Partnership GP by the time Partnership Unitholder Meeting begins; or

 

•

attending the Partnership Unitholder Meeting and voting your Common Units in person.

If your Common Units are held through a bank, broker or other nominee, you should follow the instructions of your bank, broker or other nominee regarding the revocation of proxies. If your bank, broker or other nominee allows you to submit your proxy via telephone or Internet, you may be able to change your proxy by submitting a proxy again by telephone or Internet.

For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	WHAT IS THE RECORD DATE FOR THE PARTNERSHIP UNITHOLDER MEETING?

 

A:	The record date for Partnership Unitholder Meeting is October 25, 2021. Only holders of Common Units at the close of business on the record date are entitled to notice of, and to vote at, the Partnership Unitholder Meeting.

 

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For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	WHAT IS THE VOTE REQUIRED OF UNITHOLDERS TO APPROVE THE TRANSACTION AGREEMENT AND THE TRANSACTIONS?

 

A:

Pursuant to the Transaction Agreement and the Partnership Agreement, holders of at least a majority of the issued and outstanding Common Units must affirmatively vote or consent in favor of the Transactions Proposal in order for it to be approved. Failures to vote, in addition to abstentions and broker non-votes, will have the same effect as a vote against the Transactions Proposal for purposes of the vote required under the Transaction Agreement and the Partnership Agreement. Your vote is important.

Pursuant to the terms of the Transaction Agreement, each of Landmark Dividend and the Buyer Parties agreed to vote all Common Units then owned beneficially or of record by it or any of its subsidiaries in favor of the approval of the Transaction Agreement and the Transactions at any meeting of the Unitholders.

 

Q:	HOW DO I VOTE MY COMMON UNITS IF I HOLD SUCH UNITS IN MY OWN NAME?

 

A:

After reading this proxy statement carefully, please respond by completing, signing and dating your proxy card and returning in the enclosed postage-paid envelope, or by submitting your proxy by telephone or the Internet as soon as possible in accordance with the instructions provided under “Information about the Partnership Unitholder Meeting and Voting—Submitting a Proxy Card” and “Information about the Partnership Unitholder Meeting and Voting—Submitting a Proxy via Telephone or Internet.”

 

Q:	IF MY COMMON UNITS ARE HELD IN “STREET NAME” BY MY BANK, BROKER OR OTHER NOMINEE, WILL MY BANK, BROKER OR NOMINEE VOTE MY COMMON UNITS FOR ME?

 

A:

Your bank, broker or other nominee will only be permitted to vote your Common Units if you instruct the bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your Common Units. Banks, brokers or other nominees who hold Common Units in “street name” for customers only have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the Transactions Proposal, and, as a result, absent specific instructions from the beneficial owner of such Common Units, banks, brokers or other nominees are not empowered to vote those Common Units on such non-routine matters. Accordingly, if you do not instruct your bank, broker or other nominee to vote your Common Units, your Common Units will not be voted, and this will have the same effect as a vote cast “AGAINST” the Transactions Proposal.

 

Q:	WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?

 

A:	If you received more than one proxy card, your Common Units are likely registered in different names or with different addresses or are in more than one account. You must separately submit each proxy card that you receive in order for all of your Common Units to be voted at the meeting.

For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	WHAT HAPPENS IF I SELL MY COMMON UNITS BEFORE THE PARTNERSHIP UNITHOLDERS MEETING?

 

A:

The record date for Common Units entitled to vote at the Partnership Unitholders Meeting is earlier than both the date of the Partnership Unitholders Meeting and the consummation of the Transactions. If you transfer your Common Units after the record date of the Partnership Unitholders Meeting but before the

 

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Partnership Unitholder Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your Common Units and each of you notifies the Partnership in writing of such special arrangements, you will retain your right to vote such Common Units at the Partnership Unitholder Meeting but will transfer the right to receive the Partnership Unaffiliated Unitholders Consideration, if the Transactions are completed, to the person to whom you transfer your Common Units.

For additional information, see “Information about the Partnership Unitholder Meeting and Voting.”

 

Q:	WHAT HAPPENS IF I SELL MY COMMON UNITS AFTER THE PARTNERSHIP UNITHOLDER MEETING BUT BEFORE THE CLOSING DATE?

 

A:

If you transfer your Common Units after the Partnership Unitholder Meeting but before the Closing Date, you will have transferred the right to receive the Partnership Unaffiliated Unitholders Consideration, if the Transactions are completed, to the person to whom you transfer your Common Units. In order to receive the Partnership Unaffiliated Unitholders Consideration, you must hold your Common Units through completion of the Transactions.

 

Q:	WHO WILL SOLICIT AND PAY THE COST OF SOLICITING PROXIES?

 

A:

The Partnership has engaged Okapi Partners LLC (“Okapi Partners”) to assist in the solicitation of proxies for the Partnership Unitholder Meeting. Okapi Partners will be paid fees not to exceed $360,000, plus additional payments for calls with non-institutional investors by the Partnership for these and other consulting, analytic and advisory services in connection with the Partnership Unitholder Meeting. In addition, the Partnership has agreed to reimburse Okapi Partners for certain fees and expenses and will also indemnify Okapi Partners, its subsidiaries and their respective directors, officers, employees and agents against certain claims, liabilities, losses, damages and expenses. Forms of proxies and proxy materials may also be distributed through brokers, banks and other nominees to the beneficial owners of Common Units, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses.

Proxies also may be solicited by the Partnership GP’s and its Affiliates’ directors, officers and employees by telephone, electronic mail, letter, facsimile or in person, but no additional compensation will be paid to them.

 

Q:	HOW WILL I RECEIVE THE PARTNERSHIP UNAFFILIATED UNITHOLDERS CONSIDERATION TO WHICH I AM ENTITLED?

 

A:

Promptly after the consummation of the Transactions, Computershare, Inc., as paying agent (the “Paying Agent”), will mail or provide to each holder of record of Common Units certain transmittal materials and instructions for use in effecting the surrender of Common Units to the Paying Agent. If your Common Units are held in “street name” through a bank, broker or other nominee, you should contact your bank, broker or other nominee for instructions as to how to effect the surrender of your “street name” Common Units in exchange for the Partnership Unaffiliated Unitholders Consideration.

For additional information, see “The Transaction Agreement—Surrender of Common Units and Preferred Units.”

 

Q:	HOW MANY VOTES DO I HAVE?

 

A:	You are entitled to one vote for each Common Unit owned by you as of the record date, October 25, 2021.

 

Q:	WHERE CAN I FIND THE VOTING RESULTS OF THE PARTNERSHIP UNITHOLDER MEETING?

 

A:	The preliminary voting results are expected to be announced at the Partnership Unitholder Meeting. In addition, within four business days following the certification of the final voting results, the Partnership will file the final voting results with the SEC on a Current Report on Form 8-K.

 

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Q:	WHEN DO YOU EXPECT THE TRANSACTIONS TO BE COMPLETED?

 

A:	Assuming timely satisfaction of other closing conditions, including the approval by the Unitholders of the Transactions Proposal, the Transactions are targeted to close in the fourth quarter of 2021.

 

Q:	WHAT IF THE TRANSACTIONS ARE NOT COMPLETED?

 

A:

If the Transactions Proposal is not approved by the Unitholders, or if the Transactions are not completed for any other reason, you will not receive the Partnership Unaffiliated Unitholders Consideration for your Common Units in connection with the Transactions, you will continue to own the Common units that you currently own, and the Common Units will continue to be listed on the NASDAQ Global Market.

 

Q:	WHAT IS “HOUSEHOLDING”?

 

A:

The SEC has adopted rules that permit companies and intermediaries (such as brokers or banks) to satisfy the delivery requirements for proxy statements with respect to two or more security holders sharing the same address by delivering a single notice or proxy statement addressed to those security holders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for security holders and cost savings for companies.

Banks, brokers and other nominees may be participating in the practice of “householding” proxy statements and annual reports. As indicated in the notice provided by these banks, brokers and other nominees to Unitholders, a single proxy statement will be delivered to multiple Unitholders sharing an address unless contrary instructions have been received from an affected unitholder. Once you have received notice from your bank, broker or other nominee that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you would prefer to receive separate copies of the proxy statement either now or in the future, please contact your bank, broker or other nominee or contact Okapi Partners, the Partnership’s proxy solicitor, at 212-297-0720, or contact the Partnership by written or oral request to the Partnership at 400 Continental Blvd., Suite 500, El Segundo, California 90245 or by telephone at 213-788-4528.

 

Q:	WHO CAN HELP ANSWER MY QUESTIONS?

 

A:	If you have any questions about the Transactions Proposal, need additional copies of this proxy statement or the enclosed proxy card or require assistance in voting your Common Units, you should contact the Partnership’s proxy solicitor, Okapi Partners, at 212-297-0720.

 

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ADMISSION AND TICKET REQUEST PROCEDURE

ADMISSION

Admission is limited to unitholders of record as of October 25, 2021 and one immediate family member, or one individual designated as a unitholder’s authorized proxy holder or one representative designated in writing to present a unitholder proposal. In each case, the individual must have an admission ticket and valid government issued photo identification to be admitted to the Partnership Unitholder Meeting. In addition, share ownership will be verified by one of the following methods:

 

REGISTERED UNITHOLDERS		STREET NAME HOLDERS
Option A   •   A copy of your proxy card or notice showing unitholder name and address; or   Option B   •   Name(s) of unitholder •   Address •   Phone number and •   Social security number or Computershare account number		One of the following:   •   A copy of your October brokerage account statement showing Partnership stock ownership as of October 25, 2021; or •   A letter from your broker, bank or other nominee verifying your ownership as of October 25, 2021; or •   A copy of your brokerage account voting instruction card showing unitholder name and address.
Also include:   •   Name of immediate family member guest, if not a unitholder. •   Name of authorized proxy representative, if applicable. •   Address where tickets should be mailed and phone number.		Also include:   •   Name of immediate family member guest, if not a unitholder. •   Name of authorized proxy representative, if applicable. •   Address where tickets should be mailed and phone number.

TICKET REQUEST DEADLINE

Ticket requests must include all information specified in the applicable table above and be submitted in writing and received by the Partnership on or before December 2, 2021. No requests will be processed after that date.

TO SUBMIT A REQUEST

Submit ticket requests by email to mchoi@landmarkmlp.com or by mail to Investor Relations, 400 Continental Blvd., Suite 500, El Segundo, CA 90245, Attention: Marcelo Choi. Ticket requests by telephone will not be accepted.

AUTHORIZED PROXY REPRESENTATIVE

A unitholder may appoint a representative to attend the Partnership Unitholder Meeting and/or vote on his/her behalf. The admission ticket must be requested by the unitholder but will be issued in the name of the authorized representative. Individuals holding admission tickets that are not issued in their name will not be admitted to the Partnership Unitholder Meeting. The unitholder information specified above and a written proxy authorization must accompany the ticket request.

 

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THE TRANSACTIONS

This discussion of the Transactions is qualified in its entirety by reference to the Transaction Agreement, a copy of which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read carefully the Transaction Agreement in its entirety because it, and not this proxy statement, is the legal document that governs the terms of the Transactions, including the First Partnership Merger and the Second Partnership Merger.

The Partnership is a limited partnership formed under Delaware law, and the Partnership GP serves as the general partner of the Partnership. The Board of the Partnership GP oversees the management of the Partnership, and unlike a corporation, the duties that the Partnership GP and its board members owe to the Partnership are determined solely by the terms of the Partnership Agreement and not by the fiduciary duties that are required by directors of a corporation. Under the Partnership Agreement, the standard of required conduct by the general partner is to make determinations and take actions in good faith (as defined in the Partnership Agreement), and the Partnership Agreement contains a broad waiver of any fiduciary duties. The general partner has an option, but not an obligation, under the Partnership Agreement to refer any matter that might constitute a potential conflict of interest to the Conflicts Committee, and, if the Conflicts Committee approves the matter, then approval shall be deemed to have been in good faith. The Board elected its option to refer the negotiation of the Transactions to the Conflicts Committee because of the conflict of interest, and the Conflicts Committee negotiated and approved the terms of the Transactions. The Partnership GP did not grant authority to the Conflicts Committee to negotiate the sale of the Partnership to a third party as the Partnership GP is not considering pursuing a third party sale and under the terms of the Partnership Agreement, the Partnership GP has no duty to pursue any sale of its interests in the Partnership.

Background of the Transactions

On May 15, 2021, Digital LD Management / Non-REIT Holdings, LP, an affiliate of the Buyer Parties (together with its affiliates, “DigitalBridge”) entered into a Purchase and Sale Agreement (the “PSA”) with Landmark Dividend Holdings II LLC, an affiliate of Landmark Dividend, providing for the acquisition (the “Sponsor Acquisition”) of Landmark Dividend and the Landmark Dividend Common Units from affiliates of American Infrastructure Funds LLC. From the initial public offering of the Partnership in 2014 until the Sponsor Acquisition, the Partnership GP and Landmark Dividend had been controlled by affiliates of American Infrastructure Funds LLC.

Prior to entering into the PSA with DigitalBridge, Landmark Dividend entered into customary non-disclosure agreements with potential acquirers of Landmark Dividend, pursuant to which such counterparties agreed to customary standstill provisions restricting their ability to purchase units of the Partnership.

Prior to the closing of the Sponsor Acquisition, on May 17, 2021, DigitalBridge informed the Board and issued a press release of its intent to submit a proposal to acquire all of the outstanding limited partner interests of the Partnership that were not already owned by DigitalBridge for cash consideration of $13.00 per Common Unit.

On May 18, 2021, in light of the publicly announced acquisition of the Partnership GP by DigitalBridge and DigitalBridge’s publicly announced intent to submit a proposal to acquire all of the outstanding limited partner interests of the Partnership that were not already owned by DigitalBridge, the independent members of the Board held an initial meeting to discuss expected key workstreams with respect to a potential proposal from the DigitalBridge.

In late May 2021, the independent members of the Board interviewed potential legal counsels and selected Gibson, Dunn & Crutcher LLP (“Gibson Dunn”) as its legal counsel with respect to a potential proposal from DigitalBridge.

 

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In late May and early June 2021, the independent members of the Board interviewed potential financial advisors and selected Evercore as its financial advisor with respect to a potential proposal from DigitalBridge.

Upon closing of the Sponsor Acquisition on June 2, 2021, DigitalBridge acquired control of the Partnership GP and the Partnership. On the same day, DigitalBridge submitted to the Board a written letter proposing to acquire all of the outstanding limited partner interests of the Partnership that were not already owned by DigitalBridge for cash consideration of $13.00 per Common Unit (the “Sponsor Proposal”).

On June 3, 2021, the independent members of the Board met with Gibson Dunn to discuss the written proposal letter submitted by DigitalBridge regarding the Sponsor Proposal.

 

On June 8, 2021, the independent members of the Board met with the remaining members of the Board and the Management regarding the Sponsor Proposal. Later that day, the independent members of the Board met with Gibson Dunn to discuss the Sponsor Proposal.

On June 9, 2021, Simpson Thacher & Bartlett LLP (“Simpson”), legal counsel to DigitalBridge and the Partnership GP, sent Gibson Dunn a draft written consent of the Board establishing and delegating authority to the Conflicts Committee to, among other things, review, consider and evaluate the Sponsor Proposal. Gibson Dunn sent a revised draft Board consent to Simpson the same day, which contained, among other things, the request to authorize and empower the Conflicts Committee to solicit, review and analyze alternative transactions and such strategic options for the Partnership as the Conflicts Committee deemed appropriate in its sole discretion. On June 11, 2021, Simpson sent Gibson Dunn a further revised draft Board consent rejecting such request. On June 14, 2021, Simpson finalized the draft Board consent establishing and delegating authority to the Conflicts Committee with respect to the Sponsor Proposal, which did not authorize the Conflicts Committee to solicit any alternative transactions or consider third-party proposals to acquire the Partnership or its assets.

On June 15, 2021, the Board met to receive a status update of the Sponsor Proposal. By resolution, the Board established the Conflicts Committee, comprising Messrs. Benson, Tywoniuk and White, and authorized and empowered the Conflicts Committee to, among other things: (i) review, consider and evaluate the Sponsor Proposal and the terms and conditions of the Sponsor Proposal and any agreements and arrangements related thereto on behalf of the Partnership and/or Unitholders other than the Partnership GP and its Affiliates; (ii) negotiate the terms and any documentation of the Sponsor Proposal and the related arrangements directly with each of DigitalBridge and its affiliates and/or the Management and the counsel and advisors to each of them, as it may deem necessary, appropriate or advisable, in the Conflicts Committee’s sole discretion; (iii) consult with, advise and/or direct the Management in connection with discussions and/or negotiations concerning potential terms and conditions of the Sponsor Proposal and the related arrangements; (iv) determine whether the Sponsor Proposal and the related arrangements are in the best interests of the Partnership; (v) determine whether to recommend that the Board approve or not approve, as applicable, the Sponsor Proposal and the related arrangements, with any such approval and related recommendation of the Conflicts Committee constituting “Special Approval” for all purposes under the Partnership Agreement; (vi) make a recommendation to the Board whether it should (a) approve the Sponsor Proposal and the related arrangements and (b) recommend the Sponsor Proposal and the related arrangements to the Partnership Unaffiliated Common Unitholders (it being understood that the Board, acting for and on behalf of the Partnership GP in its capacity as the general partner of the Partnership, shall ultimately make a determination to approve or not approve the Sponsor Proposal and the related arrangements on behalf of the Partnership).

On June 22, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss certain key issues and considerations in the evaluation and negotiation of the Sponsor Proposal, including the scope of the financial and legal due diligence to be conducted by Evercore and Gibson Dunn. The Conflicts Committee and Gibson Dunn also discussed materials prepared by Gibson Dunn regarding duties of directors of the Partnership GP, the framework for resolution of conflicts of interest involving the Partnership, and the process and recommendations for resolution of conflicts of interest in connection with the Sponsor Proposal.

 

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On July 1, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore, DigitalBridge and Landmark Dividend. The Management presented to the Conflicts Committee the business plan prepared by Landmark Dividend, which included preliminary financial projections for the Partnership, in connection with the Conflicts Committee’s review, consideration and evaluation of the Sponsor Proposal.

On July 2, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss the business plan presented by the Management on the day before.

On July 16, 2021, Verde Investments, Inc. (“Verde”) submitted a written letter to the Board proposing to acquire all of the outstanding limited partner interests of the Partnership that were not already owned by Verde for cash consideration of $13.50 per Common Unit (the “Verde Proposal”).

Later that day, Gibson Dunn had a call with Simpson regarding interactions among the Management, Verde, Simpson, and legal counsel to Verde. Simpson stated, on behalf of DigitalBridge and the Partnership GP, that the Conflicts Committee was not authorized, and would not be authorized, by the Board to engage with Verde and the Partnership GP would not consider any third party offers, including the Verde Proposal. Gibson Dunn requested that the Partnership GP provide the Conflicts Committee with any valuation materials that might be provided by Verde. No valuation materials were provided by Verde.

After Gibson Dunn’s call with Simpson, the Conflicts Committee met with representatives of Gibson Dunn and Potter Anderson & Corroon LLP (“Potter Anderson”), Delaware counsel to the Conflicts Committee. Gibson Dunn reported on the call with Simpson. The Conflicts Committee and representatives of Gibson Dunn and Potter Anderson then discussed certain considerations with respect to DigitalBridge’s becoming the new owner of the Partnership GP and its business plan for the Partnership. The Conflicts Committee also discussed with Gibson Dunn and Potter Anderson the recommended practices of members of the Conflicts Committee in carrying out their other responsibilities as directors of the Board of the Partnership GP during the pendency of the Conflicts Committee’s review, consideration and evaluation of the Sponsor Proposal.

On July 19, 2021, the Conflicts Committee met with the Board and the Management at which the Management discussed the Verde Proposal, including the Management’s views of the shortcomings of the Verde Proposal, and confirmed that DigitalBridge was not considering the sale of the Partnership or any of its assets to any third parties and that the Conflicts Committee was not authorized to engage with Verde or any other third party. After the announcement of the Transactions on August 23, 2021, based on filings made with the SEC, Verde sold all of its Common Units at a price less than $16.50 per Common Unit.

On July 22, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss the preliminary discussion materials prepared by Evercore evaluating the Sponsor Proposal based on the preliminary data, including the preliminary financial projections provided by Management. Evercore discussed, among other things, (i) an overview of the Partnership; (ii) summary market data; (iii) research analyst estimates; (iv) rental revenue by segment; (v) an overview of the unitholders; and (vi) a preliminary analysis of assumptions and the preliminary financial projections in the business plan provided by Management. The Conflicts Committee and representatives of Gibson Dunn and Evercore also discussed the financial and legal due diligence conducted to date by Evercore and Gibson Dunn, respectively. The Conflicts Committee directed Evercore to, among other things, engage with Management and its advisors regarding the business plan and financial projections and prepare sensitivity analyses thereof.

On July 28, 2021, Evercore met with Management to discuss the preliminary financial projections provided on July 1, 2021. During the course of this discussion, Evercore posed a number of questions to Management and proposed certain minor changes based on Evercore’s observations related to balance sheet, leverage, interest expense, distribution rates and development projects. Management reviewed and agreed with the proposed changes on July 30, 2021.

 

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On July 30, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss updated preliminary discussion materials prepared by Evercore evaluating the Sponsor Proposal based on additional data provided by DigitalBridge.

On August 2, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss the further updated discussion materials prepared by Evercore evaluating the Sponsor Proposal based on

additional information provided by Management. After such discussion, the Conflicts Committee members unanimously agreed to make a counterproposal of $16.50 cash per Common Unit not already owned by DigitalBridge, with such counterproposal being subject to completion of certain tax analyses requested by the Conflicts Committee to be provided by DigitalBridge and negotiation of definitive transaction documents (the “Counterproposal”). The Conflicts Committee directed Evercore to deliver the Counterproposal orally to DigitalBridge’s financial advisor, TAP Advisors (“TAP”), which Evercore did on August 3, 2021.

On August 3, 2021, Melody Investment Advisors LP (“Melody”) delivered to the Partnership GP and publicly disclosed a letter addressed to the Conflicts Committee proposing the purchase by Melody of 100% of the assets currently owned by the Partnership through one or a series of transactions that would result in holders of the Partnership’s Common Units receiving $16.25 per Common Unit in cash (the “Melody Proposal”).

On August 4, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss the Melody Proposal.

On August 5, 2021, Gibson Dunn had several calls with Simpson about the Melody Proposal, the Sponsor Proposal and the Counterproposal. Simpson reported that DigitalBridge and the Partnership GP did not plan to engage with Melody with respect to the Melody Proposal. Simpson confirmed that the Board had not authorized the Conflicts Committee to engage with Melody. Gibson Dunn requested, on behalf of the Conflicts Committee, for the Board to delegate authority to the Conflicts Committee so that the Conflicts Committee would be authorized to review, consider and evaluate transactions or proposals that may be proposed or presented to the Board by third parties unaffiliated with DigitalBridge, including with respect to the Melody Proposal. Simpson, on behalf of DigitalBridge and the Partnership GP, rejected the request and indicated the request would not be reconsidered as DigitalBridge was not interested in selling the Partnership or its assets to any third party. Simpson, on behalf of DigitalBridge, inquired whether anything had changed with respect to the Conflicts Committee’s Counterproposal and whether the Conflicts Committee would engage in negotiations of transaction documents if DigitalBridge proposed a revised price per Common Unit of at least $16.00. Gibson Dunn requested that the Partnership GP provide the Conflicts Committee with any valuation materials that might be provided by Melody. No valuation materials were provided by Melody. Evercore also had calls with TAP with respect to the Melody Proposal, the Sponsor Proposal and the Counterproposal.

Later in the afternoon on August 5, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson. Evercore reported on the calls with TAP, and Gibson Dunn reported on the calls with Simpson. After a lengthy discussion, the Conflicts Committee determined that Gibson Dunn should deliver an oral response to Simpson that the Conflicts Committee reaffirmed its Counterproposal of $16.50 cash per Common Unit not already owned by DigitalBridge, subject to an expeditious process, completion of the pending tax analyses and negotiation of definitive transaction documents, which Gibson Dunn did later that day.

On August 7, 2021, Evercore had calls with TAP regarding the Conflicts Committee’s Counterproposal. Gibson Dunn also had a call with Simpson regarding the Melody Proposal and the Conflicts Committee’s Counterproposal. Simpson stated that DigitalBridge was not interested in selling the Partnership or its assets, and that DigitalBridge’s Sponsor Acquisition was premised on DigitalBridge’s eventual acquisition of all the limited partner interests of the Partnership or continued ownership of the Partnership’s general partner interest and incentive distribution rights. As a result, Simpson stated that DigitalBridge would not support a transaction with Melody or any third party, and that the Partnership GP would not grant the Conflicts Committee authority to consider third party offers or engage with any such offerors on behalf of the Partnership. Simpson, on behalf of DigitalBridge, asked for confirmation that the Conflicts Committee would engage in negotiations of transaction documents if DigitalBridge were to agree to the terms of the Counterproposal.

 

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On August 8, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson. Evercore reported on the discussion with TAP, and Gibson Dunn reported on its call with Simpson. After a lengthy discussion, the Conflicts Committee agreed that Evercore and Gibson Dunn should deliver oral responses to TAP and Simpson, respectively, that the Conflicts Committee reaffirmed its Counterproposal and would engage in negotiations of transaction documents if DigitalBridge were to agree to the terms of the Counterproposal, but would not make a final decision or grant any approvals at that time. Evercore and Gibson Dunn conveyed such message to TAP and Simpson, respectively, later that day.

On August 13, 2021, a company that provides communications infrastructure services (“Party A”) submitted a letter addressed to the Conflicts Committee proposing the purchase by Party A of 100% of the wireless communications assets currently owned by the Partnership for a purchase price of $550 million in cash (the “Party A Proposal”).

On August 13, 2021, Simpson sent an initial draft of the Transaction Agreement to Gibson Dunn. The terms set forth in the draft Transaction Agreement included, among other things: (i) merger consideration of $16.50 cash per Common Unit; (ii) a “no-shop” provision prohibiting the Partnership, its subsidiaries and representatives, and the Partnership GP, from soliciting acquisition proposals, or negotiating with, or providing non-public information to, a person who makes an unsolicited acquisition proposal; (iii) a provision allowing the Conflicts Committee to make a Partnership Adverse Recommendation Change subject to any Intervening Event, which specifically excluded acquisition proposals; (iv) a provision specifying that a Partnership Adverse Recommendation Change would not affect the validity of Special Approval granted by the Conflicts Committee; and (v) a termination fee and a reverse termination fee in equal amounts payable by the Partnership and the Buyer Parties, respectively, if the Transaction Agreement were terminated in certain circumstances.

On August 16, 2021, Gibson Dunn had a call with Simpson. Simpson stated, on behalf of DigitalBridge, that DigitalBridge had not changed its prior position and would not consider any third party’s offer to purchase the Partnership or its assets. Simpson reiterated, on behalf of DigitalBridge and the Partnership GP, that the Board would not grant the Conflicts Committee authority to consider third-party offers or engage with any such offerors on behalf of the Partnership, including with respect to the Party A Proposal. Gibson Dunn requested that the Partnership GP provide the Conflicts Committee with any valuation materials that might be provided by Party A. No valuation materials were provided by Party A.

Later in the afternoon on August 16, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss status updates on the transaction process, the initial draft of the Transaction Agreement, and Gibson Dunn’s call with Simpson regarding the Party A Proposal. Evercore provided certain financial observations regarding the Party A Proposal.

On August 17, 2021, Gibson Dunn sent a revised draft of the Transaction Agreement to Simpson reflecting the revisions the Conflicts Committee and Gibson Dunn had discussed, including, among others, (i) adding Landmark Dividend and certain of its affiliates as parties to the Transaction Agreement; (ii) deleting the “no-shop” provision; (iii) allowing the Conflicts Committee to make a Partnership Adverse Recommendation Change not subject to any Intervening Event; (iv) deleting the provision specifying that a Partnership Adverse Recommendation Change would not affect the validity of Special Approval granted by the Conflicts Committee; (v) requiring the Partnership to continue to make distributions to the common unitholders through Closing; (vi) adding standstill provisions applicable to the Buyer Parties; (vii) requiring approval of the Transaction Agreement and the Transactions by holders of a majority of the outstanding Common Units excluding Common Units owned by DigitalBridge; (viii) requiring Landmark Dividend to vote all of its Common Units in favor of the approval of the Transaction Agreement and the Transactions; and (ix) increasing the Buyer Termination Fee and decreasing the Partnership Termination Fee payable by the Buyer Parties and the Partnership, respectively, if the Transaction Agreement were terminated in certain circumstances.

On August 18, 2021, Simpson sent a revised draft of the Transaction Agreement to Gibson Dunn. The revised drafted provided for, among other things, (i) the addition of Landmark Dividend as a party to the

 

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Transaction Agreement for certain limited purposes; (ii) adding back the Intervening Event limitation for a Partnership Adverse Recommendation Change, which no longer specifically excluded acquisition proposals; (iii) adding back the provision specifying that a Partnership Adverse Recommendation Change would not affect the validity of Special Approval granted by the Conflicts Committee; (iv) deletion of standstill provisions; and (v) deletion of the requirement for approval of the Transaction Agreement and the Transactions by the holders of a majority of the outstanding Common Units excluding Common Units owned by DigitalBridge.

On August 19, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss the revised draft Transaction Agreement, and the Conflicts Committee directed Gibson Dunn pursue certain further changes to the draft Transaction Agreement, including to clarify that Intervening Event would be defined to include alternative proposals, to delete the provision specifying that a Partnership Adverse Recommendation Change provision would not affect the validity of Special Approval granted by the Conflicts Committee, and to reinsert the standstill provisions applicable to the Buyer Parties. Following the meeting, Gibson Dunn had a call with Simpson to discuss the draft Transaction Agreement, including the treatment of acquisition proposals for purposes of the definition of Intervening Event, the effect of a Partnership Adverse Recommendation Change on Special Approval, and the standstill provisions applicable to the Buyer Parties. Following the discussion, Simpson informed Gibson Dunn that DigitalBridge would not move forward on the basis of the Conflicts Committee’s proposal with respect to the aforementioned terms and would instead proceed with DigitalBridge’s business plan for the Partnership. Mr. Arthur Brazy, Chief Executive Officer of the Partnership, called Mr. Keith Benson, member of the Conflicts Committee, and conveyed the same message to Mr. Benson. Later that afternoon, the Conflicts Committee met again with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss the revised draft Transaction Agreement, Gibson Dunn’s discussion with Simpson, and tax analyses with respect to the Transactions. The Conflicts Committee agreed to continue to progress the transaction on substantially the terms proposed by DigitalBridge on August 18, 2021, and authorized Gibson Dunn to convey that position to Simpson, which Gibson Dunn did later that evening.

From August 19, 2021 to the signing of the Transaction Agreement, Gibson Dunn and Simpson exchanged drafts of the Transaction Agreement, the Equity Commitment Letter, the Debt Commitment Letter and related documentation.

On August 20, 2021, the Conflicts Committee met with representatives of Gibson Dunn and Evercore to discuss the materials prepared by Gibson Dunn regarding the transaction structure of the Transactions and the tax implications thereof. Gibson Dunn reviewed the steps of the transaction structure, the tax treatment thereof, and the tax impact of the Transactions on the Partnership Unaffiliated Unitholders with the Conflicts Committee.

On August 21, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss final versions of the Transaction Agreement and related documentation, including the Debt Commitment Letter and the Equity Commitment Letter. Representatives of Evercore presented its financial analysis to the Conflicts Committee. Evercore discussed the valuation analyses conducted by Evercore, which had been reviewed and discussed by the Conflicts Committee members in detail during prior meetings. At the Conflicts Committee’s request, Evercore orally delivered its opinion (which was subsequently confirmed in writing) that as of August 21, 2021, subject to the assumptions, procedures, qualifications and limitations to be set forth in the written opinion, the Partnership Unaffiliated Unitholders Consideration was fair, from a financial point of view, to the Partnership Unaffiliated Unitholders. Evercore then left the meeting. Gibson Dunn next reminded the Conflicts Committee members of their responsibilities under the Partnership Agreement and the legal framework in which to consider the Potential Transaction. The members of the Conflicts Committee and representatives of Gibson Dunn and Potter Anderson then discussed the Transaction Agreement and the transactions contemplated thereby. Thereafter, the Conflicts Committee unanimously (i) determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the Partnership Unaffiliated Unitholders, (ii) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, such approval constituting “Special Approval” of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, for all purposes under the Partnership Agreement, and (iii) recommended that the Board approve

 

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the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement, and the consummation of the transactions contemplated thereby, including the Transactions.

Later in the afternoon on August 21, 2021, at a telephonic meeting of the Board, the Board (a) determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders, (b) approved the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement and the consummation of the transactions contemplated thereby, including the Transactions, (c) resolved to submit the Transaction Agreement to a vote of the Unitholders and (d) recommended approval of the Transaction Agreement, including the Transactions, by the Unitholders.

Thereafter, on August 21, 2021, the Buyer Parties delivered to the Partnership Parties the executed Debt Commitment Letter and Equity Commitment Letter, and the parties executed the Transaction Agreement.

On the morning of August 23, 2021, the Partnership issued a press release announcing the execution of the Transaction Agreement.

On August 25, 2021, Landmark Dividend and certain of its affiliates amended the Schedule 13D filed with the SEC to describe certain terms and conditions of the Transactions and its intent in connection therewith, including that Landmark Dividend agreed to vote all Common Units then owned beneficially or of record by it in favor of the approval of the Transaction Agreement and the Transactions and Landmark Dividend and each of the Buyer Parties agreed not to, and to cause each of their subsidiaries not to, directly or indirectly, transfer, assign or otherwise dispose of any Common Units owned by Landmark Dividend, such Buyer Party or its subsidiaries, other than to any of their respective affiliates and that during the pendency of the Transactions Landmark Dividend or their affiliates may, at any time and from time to time, acquire additional securities of the Partnership in the open market or in privately negotiated transactions.

On September 3, 2021, Melody sent to the Board a letter addressed to the Conflicts Committee presenting a time-limited proposal to acquire all the assets of the Partnership in a transaction that would result in payment of $22.00 per Common Unit (the “Revised Melody Proposal”). Landmark Dividend believes Melody is a direct competitor whose proposal is not actionable primarily because Landmark Dividend is not evaluating third party offers. If a vote of the Unitholders on the Transactions that would result in Unitholders receiving $16.50 per Common Unit is not successful, Landmark Dividend intends for the Partnership to continue as a publicly traded limited partnership.

On the same day, Gibson Dunn had a call with Simpson regarding the Revised Melody Proposal, during which Simpson informed Gibson Dunn that DigitalBridge and the Partnership GP would not entertain the Revised Melody Proposal or otherwise engage with Melody.

On September 5, 2021, Simpson again informed Gibson Dunn that DigitalBridge and the Partnership GP had no intention to engage with Melody or to otherwise pursue a sale of the Partnership or its assets to any third party. Simpson reiterated that the Partnership GP would not grant the Conflicts Committee authority to consider third-party offers or engage with any such offerors on behalf of the Partnership, including with respect to the Revised Melody Proposal. Simpson stated, on behalf of DigitalBridge and the Partnership GP, that if the Unitholders would not approve the Transaction Agreement and the Transactions, the Partnership would continue as a publicly traded partnership under control of DigitalBridge. Gibson Dunn requested that the Partnership GP provide the Conflicts Committee with any materials that might be provided by Melody.

On September 7, 2021, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss the Revised Melody Proposal. Gibson Dunn reported on the discussions with Simpson regarding the Revised Melody Proposal. After a lengthy discussion, noting the Revised Melody Proposal did not include details about valuation of the Common Units, the general partner interest or the incentive distribution rights or financing sources, the Conflicts Committee members agreed that Gibson Dunn should ask Simpson for more information with respect to the Revised Melody Proposal, which Gibson Dunn did later that day.

 

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On September 8, 2021, the Board held a meeting to discuss the Revised Melody Proposal. During the meeting, DigitalBridge explained that Landmark Dividend believed Melody was a direct competitor whose proposal was not actionable primarily because Landmark Dividend is not evaluating third party offers. The Conflicts Committee again requested authority to engage with Melody, and DigitalBridge and the Partnership GP rejected such request because Landmark Dividend is not considering third party offers. The Conflicts Committee also requested that the Partnership GP request valuation materials and other information from Melody, and DigitalBridge and the Partnership GP rejected such request. DigitalBridge confirmed that if the Transactions were not successful, Landmark Dividend intended for the Partnership to continue as a publicly traded limited partnership. Later that afternoon, the Conflicts Committee met with representatives of Gibson Dunn, Evercore and Potter Anderson to discuss the meeting with DigitalBridge.

On September 9, 2021, the Conflicts Committee authorized the filing of this proxy statement pursuant to the terms of the Transaction Agreement.

On September 13, 2021, Landmark Dividend acquired 152,400 Common Units through open market purchases.

On September 14, 2021, Landmark Dividend acquired 4,511 Common Units through open market purchases.

On September 15, 2021, Landmark Dividend acquired 1,350 Common Units through open market purchases.

On September 17, 2021, Melody sent to the Board a letter addressed to the Conflicts Committee (the “Melody Confirmation Letter”) informing the Conflicts Committee that the Revised Melody Proposal would no longer be time limited and confirmed that the Revised Melody Proposal would continue to remain outstanding. In any event, Landmark Dividend is not considering third party offers. If a vote of the Unitholders on the Transactions that would result in Unitholders receiving $16.50 per Common Unit is not successful, Landmark Dividend intends for the Partnership to continue as a publicly traded limited partnership.

On October 7, 2021, Landmark Dividend acquired 224,230 Common Units through open market purchases.

On October 8, 2021, Landmark Dividend acquired 176,360 Common Units through open market purchases.

On October 11, 2021, Landmark Dividend acquired 452,158 Common Units through open market purchases.

On October 12, 2021, Landmark Dividend acquired 695,091 Common Units through open market purchases, resulting in Landmark Dividend owning 5,066,408 Common Units, which represents approximately 19.9% of the total outstanding Common Units.

Reasons for the Conflicts Committee’s Recommendation

By vote at a meeting of the Conflicts Committee on August 21, 2021, the Conflicts Committee unanimously (i) determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the Partnership Unaffiliated Unitholders, (ii) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, such approval constituting “Special Approval” of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, for all purposes under the Partnership Agreement, and (iii) recommended that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement, and the consummation of the transactions contemplated thereby, including the Transactions. In evaluating the Transaction Agreement and the transactions contemplated thereby, the Conflicts Committee considered information supplied by Management, consulted with its legal and financial advisors, and considered a number of factors in reaching its determination, approval and recommendation. The Conflicts Committee also consulted with its legal counsel regarding its authority and duties.

In the course of determining that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the Partnership Unaffiliated Unitholders, the Conflicts Committee considered the following factors to be generally positive or favorable in making its determination and grant of Special Approval, and the related recommendation to the Board:

 

23

•

Through negotiation, the Conflicts Committee was able to increase the Partnership Unaffiliated Unitholders Consideration by 26.9% as compared to the offer initially proposed by DigitalBridge on June 2, 2021, as discussed under “Background of the Transactions.”

 

•

The Conflicts Committee’s belief that $16.50 per Common Unit was DigitalBridge’s final offer and the conclusion reached by the Conflicts Committee that $16.50 per Common Unit was likely the highest price per Common Unit that DigitalBridge would be willing to pay at the time of the Conflicts Committee’s determination and grant of the Special Approval.

 

•

The Partnership Unaffiliated Unitholders Consideration constitutes a 16.5% premium to the closing price per Common Unit on August 20, 2021 (the last trading day prior to the approval of the Transactions) and a 38.4% premium to the closing price per Common Unit on May 14, 2021 (the last trading day prior to the day on which DigitalBridge publicly announced its intent to propose the acquisition of all of the Common Units held by the Unaffiliated Unitholders at $13.00 per Common Unit).

 

•

The financial analyses prepared by Evercore, as financial advisor to the Conflicts Committee, and the oral opinion of Evercore delivered to the Conflicts Committee on August 21, 2021 and subsequently confirmed in writing, which opinion the Conflicts Committee adopted as its own, that, based upon and subject to the factors, procedures, assumptions, qualifications, limitations and others matters set forth in its written opinion (as more fully described below under “Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee”), the Partnership Unaffiliated Unitholders Consideration was fair, from a financial point of view, to the Partnership Unaffiliated Unitholders.

 

•

The Partnership Unaffiliated Unitholders Consideration is an all-cash amount, which the Conflicts Committee believes provides greater value to the Partnership Unaffiliated Unitholders than the long-term value of the Partnership as a publicly traded partnership, after taking into account the opportunities for, as well as the risks and challenges facing, the Partnership’s current business and financial prospects.

 

•

In connection with the entry into the Transaction Agreement and to provide financing for the consideration to be paid in the Transactions, Digital Colony Partners II, LP entered into a $510,000,000 binding equity commitment letter with the Buyer Parties and LM DV Infra entered into a binding debt commitment letter providing for a $500,000,000 revolving credit facility.

 

•

In connection with its consideration of the Transactions, the Conflicts Committee retained and received advice from its own independent financial and legal advisors with knowledge and experience with respect to public merger and acquisition transactions, MLPs, REITs, the Partnership’s industry generally and the Partnership particularly, as well as substantial experience advising MLPs and other companies with respect to transactions similar to the Transactions.

 

•

The financial terms and conditions of the Transaction Agreement and the non-financial terms and conditions of the Transaction Agreement were determined as a result of arm’s-length negotiations between the Buyer Parties and the Conflicts Committee and their respective representatives and advisors.

 

•

Certain terms of the Transaction Agreement, principally:

 

•

Provisions requiring Landmark Dividend to pay to the Partnership the Buyer Termination Fee in the event the Transaction Agreement is terminated under certain circumstances. See “The Transaction Agreement—Remedies, Specific Performance.”

 

•

Provisions permitting the Conflicts Committee, subject to certain limitations, including the occurrence of an Intervening Event, to make a Partnership Adverse Recommendation Change if failure to do so would be inconsistent with its duties under applicable law, as modified by the Partnership Agreement.

 

•

The Partnership, subject to the requirements in the Partnership Agreement and applicable law, is required to declare and pay quarterly distributions of $0.20 per Common Unit to the holders of the Partnership’s Common Units through Closing.

 

•

The consummation of the Transactions is not conditioned upon financing, and the Buyer Parties are subject to a customary covenant to obtain the financing.

 

24

•

The limited nature of the operational representations and warranties given by the Partnership and Partnership GP.

 

•

Provisions restricting the ability of the Partnership GP or any Buyer Party to eliminate, or revoke or diminish the authority of, the Conflicts Committee, or remove any member of the Conflicts Committee between signing of the Transaction Agreement and the Closing.

 

•

Provisions requiring the consent of the Conflicts Committee to amend the Transaction Agreement, and to authorize other actions on behalf of the Partnership as specified in the Transaction Agreement.

 

•

Provisions prohibiting Landmark Dividend from transferring any Common Units and requiring Landmark Dividend to vote all of its Common Units in favor of the approval of the Transaction Agreement and the transactions contemplated thereby.

As part of its deliberative process, the Conflicts Committee considered the following factors to be generally negative or unfavorable in making its determination and grant of Special Approval, and the related recommendation to the Board:

 

•

The Conflicts Committee was not authorized to and did not engage in the review, solicitation, consideration or evaluation of acquisition proposals by third parties unaffiliated with DigitalBridge, including the Melody Proposal, the Verde Proposal, the Party A Proposal and the Revised Melody Proposal.

 

•

Certain terms of the Transaction Agreement, principally:

 

•

Provisions requiring the Partnership to pay to LM Infra the Partnership Termination Fee in the event the Transaction Agreement is terminated under certain circumstances. See “The Transaction Agreement—Remedies, Specific Performance.”

 

•

Provisions permitting LM Infra to terminate the Transaction Agreement, without any liability on the part of Buyer Parties, in the event of a Partnership Material Adverse Effect.

 

•

Provisions limiting the Partnership’s available remedies to the Buyer Termination Fee in the event the Transaction Agreement is terminated under certain circumstances.

 

•

The Partnership Unaffiliated Unitholders will not have any equity participation in the Partnership following the consummation of the Transactions, and the Partnership Unaffiliated Unitholders will accordingly cease to participate in the Partnership’s future earnings or growth, if any, or benefit from any increases, if any, in the value of the Common Units.

 

•

Risk associated with the debt and equity financing required to fund the full amount of the consideration to be paid in the Transactions, including the satisfaction of the conditions precedent to such debt and equity financing pursuant to the Debt Commitment Letter and the Equity Commitment Letter, respectively, though the Buyer Parties’ obligation to close the Transactions is not conditioned on its ability to obtain financing, and the Partnership’s lack of recourse to directly enforce the obligations of the debt and equity financing parties under the Debt Commitment Letter and Equity Commitment Letter.

 

•

The Transactions may result in a cash tax liability for certain Partnership Unaffiliated Unitholders.

 

•

The Partnership Unaffiliated Unitholders are not entitled to dissenters’ or appraisal rights under the Transaction Agreement, the Partnership Agreement or Delaware law.

 

•

The Buyer Parties and certain of the executive officers and directors of the Partnership GP have interests in the Transactions that are different from, or in addition to, the interests of the Partnership Unaffiliated Unitholders generally.

 

•

The Partnership has incurred and will continue to incur transaction costs and expenses in connection with the Transactions, whether or not the Transactions are completed.

 

•

Litigation may be commenced in connection with the Transactions, and such litigation may increase costs and result in a diversion of management focus.

 

25

•

The Transactions might not be completed in a timely manner, or at all, and failure to complete the Transactions could negatively affect the trading price of the Common Units.

In light of (i) Landmark Dividend’s ownership of the Partnership GP and its right to appoint all of the members of the Partnership GP board of directors, (ii) Partnership GP’s right to make decisions in its individual capacity free of any duties to the Partnership or its unitholders, (iii) the Conflicts Committee’s authority to consider and negotiate only the Sponsor Proposal and not alternative proposals received by the Partnership and (iv) DigitalBridge and Partnership GP’s stated intention to either acquire the Partnership or maintain the status quo and not pursue a sale of the Partnership or its assets to a third party, the Conflicts Committee also considered the following factors relating to the procedural safeguards that the Conflicts Committee believed were and are present to ensure the fairness of the Transactions and the Transaction Agreement and to permit the Conflicts Committee to make its determination and grant Special Approval, and the related recommendation to the Board, which the Conflicts Committee believes support its decision and provide assurance as to the procedural fairness of the Transactions and the Transaction Agreement to the Partnership Unaffiliated Unitholders:

 

•

The Conflicts Committee consists solely of directors who are not security holders (other than of Common Units), officers or employees of Partnership GP or affiliates of the Partnership GP, are not officers, employees or controlling shareholders of any of the DigitalBridge affiliates or the Partnership, are not otherwise affiliated with the Buyer Parties and are all independent of the Management.

 

•

The Conflicts Committee received the advice of financial advisors and legal counsel who represented that they are, and whom the Conflicts Committee determined to be, independent of the DigitalBridge entities and the Management in exercising their judgment and providing professional advice in connection with the Conflict Committee’s activities.

 

•

The Conflicts Committee and its independent advisors negotiated on an arm’s-length basis with the DigitalBridge Entities and their representatives.

 

•

The resolutions of the Board establishing the Conflicts Committee granted authority to the Conflicts Committee, including the authority to determine whether or not to grant Special Approval of the Transactions and to negotiate the terms and conditions of the Transaction Agreement and the Transactions, and the members of the Conflicts Committee were aware that they were under no obligation to recommend, and could reject, the Transactions.

The foregoing discussion of the information and factors considered by the Conflicts Committee is not intended to be exhaustive, but includes material factors the Conflicts Committee considered. In view of the variety of factors considered in connection with its evaluation of the Transactions and the complexity of these matters, the Conflicts Committee did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors considered in making its determination and recommendation. In addition, each of the members of the Conflicts Committee may have given differing weights to different factors. Overall, the Conflicts Committee believed that the positive factors supporting the Transactions outweighed the negative factors it considered. It should be noted that certain statements and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Special Note Concerning Forward-Looking Statements.”

Reasons for the Board’s Recommendation

The Board consists of six directors, three of whom are independent (Keith Benson, Thomas Carey White III and Gerald A. Tywoniuk). As such, some of the directors on the Board may have different interests in the Transactions than the Partnership Unaffiliated Unitholders. For a complete discussion of these and other interest of the members of the Board in the Transactions, see “—Interests of Certain Persons in the Transactions—Interests of Directors and Executive Officers of the Partnership GP.” Because of such possible and actual conflicts of interests, in resolutions approved by the Board on June 15, 2021, the Board authorized and empowered the Conflicts Committee to, among other things, (a) review, consider and evaluate the Transactions

 

26

and the terms and conditions of the Transactions and any agreements and arrangements related thereto on behalf of the Partnership and the Partnership Unaffiliated Unitholders, (b) negotiate the terms and any documentation of the Transactions and related agreements directly with each of DigitalBridge and its affiliates and/or the Partnership’s management and the counsel and advisors to each of them, as it deemed necessary, appropriate or advisable, in its sole discretion, (c) consult with, advise and/or direct management of the Partnership in connection with discussions and/or negotiations concerning potential terms and conditions of the Transactions and related agreements, (d) determine whether the Transactions and related agreements were in the best interests of the Partnership, (e) determine whether to recommend that the Board approve or not approve, as applicable, the Transactions and related agreements, with any such approval and related recommendation of the Conflicts Committee constituting “Special Approval” for all purposes under the Partnership Agreement, including Section 7.9(b) thereof, with respect to the Transactions and related agreements and (f) make a recommendation to the Board whether it should (i) approve the Transactions and related agreements and (ii) recommend the Transactions to the Partnership Unaffiliated Unitholders, with the Board, acting for and on behalf of the Partnership GP in its capacity as the general partner of the Partnership, ultimately making a determination to approve or not approve the Transactions and agreements on behalf of the Partnership.

By vote at a meeting of the Conflicts Committee on August 21, 2021, the Conflicts Committee unanimously (a) determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership, including the Partnership Unaffiliated Unitholders, (b) approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions, such approval constituting “Special Approval” of the Transaction Agreement and the transactions contemplated thereby, including the Transactions, for all purposes under the Partnership Agreement, and (c) recommended that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement, and the consummation of the transactions contemplated thereby, including the Transactions. In evaluating the Transaction Agreement and the transactions contemplated thereby, the Conflicts Committee considered information supplied by DigitalBridge and Management, consulted with its legal and financial advisors, and considered a number of factors in reaching its determination, approval and recommendation. For a more complete discussion of these items, see “—Reasons for the Conflicts Committee’s Recommendation” above.

In determining that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interest of the Partnership and the Partnership Unaffiliated Unitholders, and recommending that Unitholders vote in favor of the Transactions Proposal, the Board considered a number of factors, including the following material factors:

 

•

the unanimous determination and recommendation of the Conflicts Committee; and

 

•

the factors considered by the Conflicts Committee, including the material factors considered by the Conflicts Committee described under “—The Conflicts Committee” above.

In doing so, the Board expressly adopted the analysis of the Conflicts Committee, which is discussed above. In addition, under the SEC rules governing “going private” transactions, the Partnership and the Partnership GP are engaged in a “going private” transaction and, therefore, are required to express their position as to the fairness of the proposed Transactions to the Partnership’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Board, on behalf of the Partnership GP and the Partnership, is making the following statements solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The Board, on behalf of the Partnership GP and the Partnership, on the basis of the factors described above, believes that the Transactions (which is the Rule 13e-3 transaction for which a Schedule 13E-3 Transaction Statement was filed with the SEC) is both procedurally and substantively fair to the Partnership Unaffiliated Unitholders.

The Board expressly adopted the analysis of the Conflicts Committee, which expressly adopted the analyses and opinion of Evercore, among other factors considered, in the course of reaching its decision to recommend that the Board approve the Transaction Agreement, the execution, delivery and performance of the Transaction Agreement, and the consummation of the transactions contemplated thereby, including the Transactions.

 

27

The Board believes that the Transactions are substantively and procedurally fair to the holders of Preferred Units, as Preferred Units will be entitled to receive in the Transaction the exact consideration the holders of such Preferred Units would have received had they instead been redeemed rather than cashed out in the Transaction. For additional information, see “The Transaction Agreement—The Transactions Consideration.”

Other than its review and adoption of the analysis of the Conflicts Committee, the Board did not conduct a going-concern valuation of the Partnership in evaluating the Transactions because of its belief that the financial analyses presented by Evercore to the Conflicts Committee, as more fully summarized below in the section entitled “Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee,” represented potential valuations of the Partnership as it continues to operate its business as a going concern. The Board did not consider net book value, which is an accounting concept, for purposes making its recommendation, because, in the Board’s view, net book value is indicative of neither the Partnership’s market value nor its value as a going concern, but rather is an indicator of historical costs. In the course of reaching its decision to recommend to the Unitholders that they approve the Transaction Agreement and the Transactions, the Board did not consider the liquidation value of the Partnership because it considered the Partnership to be a viable, going concern and therefore did not consider liquidation value to be a relevant methodology.

The foregoing discussion is not intended to be exhaustive, but is intended to address the material information and principal factors considered by the Board in considering the Transactions. In view of the various factors and information considered, the Board did not find it practicable to, and did not make specific assessments of, quantify or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, the Board did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was determinative of its ultimate determination, and individual members of the Board may have given different weights to different factors. The Board made its recommendation based on the totality of information presented to, and the investigation conducted by, the Board. It should be noted that certain statements and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements.”

The Board recommends that the Unitholders vote “FOR” the approval of the Transactions Proposal.

Unaudited Financial Projections of the Partnership

The Partnership does not, as a matter of course, publicly disclose long-term financial projections because of, among other reasons, the uncertainty of the underlying assumptions and estimates and the unpredictability of its business and competitive markets in which it operates. While the Partnership prepares forecasts annually for internal budgeting and business planning purposes, such forecasts generally focus on the current fiscal year and the immediately following fiscal year.

The summary financial projections included in this proxy statement should not be regarded as predictive of actual future results nor should they be construed as financial guidance. The summary of the financial projections is not intended to influence or induce any Unitholder to vote in favor of the Transactions Proposal but has been included solely because these financial projections were made available to the Conflicts Committee and used by Evercore in connection with the rendering of its fairness opinion to the Conflicts Committee and performing its related financial analyses, as described in the section entitled “—Opinion of Evercore Group L.L.C. Financial Advisor to the Conflicts Committee.”

Prior to providing the financial projections included in this proxy statement to the Conflicts Committee and Evercore, a preliminary version of the financial projections were shared with the Conflicts Committee and Evercore on July 1, 2021. On July 28, 2021, Evercore reviewed and reverted with questions and proposed a number of minor changes due to Evercore’s observations related to balance sheet, leverage, interest expense, distribution rates and development projects. The preliminary financial projections were substantially the same as the financial projections included in this proxy statement other than immaterial adjustments to correct calculations based on discussions between Evercore and Management.

 

28

The Partnership’s financial projections are subjective in many respects. There can be no assurance that these financial projections will be realized or that actual results will not be significantly higher or lower than forecasted. In addition, the financial projections were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles in the United States (“GAAP”), the published guidelines of the SEC regarding projections or the use of non-GAAP financial measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The prospective financial information included in this proxy statement has been prepared by, and is the responsibility of, the Partnership’s management. No Independent Registered Public Accounting Firm has either audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the accompanying prospective financial information and the Report of Independent Registered Public Accounting Firm incorporated by reference in this proxy statement relates to the Partnership’s historical financial information. It does not extend to the prospective financial information and should not be construed to express an opinion or any other form of assurance with respect thereto.

In developing the financial projections for the years 2021 through 2026, the Partnership made numerous material assumptions with respect to its business for the periods covered by the projections. The Partnership developed a management case (the “Management Case”) of financial projections, and the Management Case assumptions included, but were not limited to, the following:

 

•

the timing, construction and start-up of growth projects of the Partnership, as well as the annual expenditures and costs to the Partnership associated with such projects;

 

•

the amount and timing of distributions to the Unitholders by the Partnership;

 

•

the amounts and nature of future capital expenditures;

 

•

the amounts and timing of tenant churn on existing portfolio assets;

 

•

the sources of funding for future growth projects, including the structure, terms, amount, and timing of debt financings;

 

•

the expiration of the cap on the Partnership’s agreement for the Partnership GP to reimburse the Partnership for a portion of its general and administrative expenses on November 19, 2021;

 

•

the amount and timing of reimbursements paid by the Partnership to the Partnership GP for costs and expenses it incurs for services provided to the Partnership;

 

•

the amounts of revenue and expenses per budget; and

 

•

other general business, market, industry, and interest rate assumptions.

Important factors that may affect actual results and cause these financial projections not to be achieved include, but are not limited to, risks and uncertainties relating to the Partnership’s business (including the Partnership’s ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, general business and economic conditions, the regulatory environment and other factors described in or referenced under “Cautionary Statement Regarding Forward-Looking Statements” and those risks and uncertainties detailed in the Partnership’s public filings with the SEC. In addition, the projections also reflect assumptions that are subject to change and do not reflect revised prospects for the Partnership’s business, changes in general business or economic conditions or any other transaction or event that has occurred or that may occur following the time the financial projections were prepared. Accordingly, there can be no assurance that these financial projections will be realized or that the Partnership’s future financial results will not materially vary from these financial projections. In addition, different assumptions could result in different projections, which may or may not be realized. No one has made or makes any representation to any Unitholder regarding the information included in the financial projections set forth below.

THE FINANCIAL PROJECTIONS INCLUDED IN THIS PROXY STATEMENT WERE MADE AVAILABLE TO THE CONFLICTS COMMITTEE AND USED BY EVERCORE IN CONNECTION WITH THEIR EVALUATION OF THE TRANSACTIONS AND PRIOR TO EXECUTION OF THE TRANSACTION AGREEMENT. THE PARTNERSHIP DOES NOT INTEND TO REVISE ANY FINANCIAL PROJECTIONS INCLUDED IN THIS PROXY STATEMENT.

 

29

Management Case

LMRK – Summary Financials 5-Year Forecast

 

($ in thousands, except per unit data)		Forecast
Income Statement		2021				2022				2023				2024				2025				2026
Revenue
Rental revenue – cash		$	66,871			$	71,784			$	74,403			$	76,572			$	78,143			$	79,745
Rental revenue - non cash			1,748				1,711				1,675				1,640				1,606				1,572
Total Revenue			68,619				73,496				76,079				78,212				79,749				81,318
General and administrative			6,058				8,999				9,564				10,066				10,485				10,913
Property operating			2,956				3,453				3,624				3,783				3,041				3,103
Acquisition costs			88				—				—				—				—				—
Depreciation and amortization			18,295				18,262				18,396				18,550				18,550				18,550
Total expenses			27,397				30,714				31,584				32,400				32,076				32,566
Interest expense			19,362				19,779				18,752				19,457				17,871				16,666
Tax, interest income, and other income/expenses			(1,103	)			(625	)			(600	)			(848	)			(1,037	)			(1,247	)
Total other			18,259				19,154				18,153				18,610				16,835				15,419
Net income			22,963				23,628				26,342				27,202				30,838				33,332
Preferred unit distributions, NCI & Other			(12,342	)			(12,240	)			(12,240	)			(12,240	)			(12,240	)			(12,240	)
Net income available to common		$	10,622			$	11,388			$	14,102			$	14,963			$	18,598			$	21,093
AFFO/unit		$	1.43			$	1.35			$	1.47			$	1.50			$	1.60			$	1.66
LP distribution declared / Unit		$	0.80			$	0.80			$	$0.80			$	0.80			$	0.80			$	0.80
Weighted average common units			25,489				25,489				25,489				25,489				25,489				25,489
($ in thousands)		Forecast
Distributable cash flow		2021				2022				2023				2024				2025				2026
EBITDA		$	61,021			$	62,350			$	64,171			$	65,891			$	67,941			$	69,230
Less:
Straight-line rent adjustments			($818	)			($816	)			($816	)			($816	)			($816	)			($816	)
Amortization of above- and below-market rents			(930	)			(895	)			(859	)			(824	)			(790	)			(756	)
Add:
Acquisition-related expenses and other			88				—				—				—				—				—
Adjustments for investments in unconsolidated JVs			6,550				5,633				5,684				5,607				5,607				5,592
Unrealized (gains) loss on derivatives and other			(1,124	)			—				—				—				—				—
Repayment of receivables and other			559				509				509				509				509				509
Expense reimbursement			3,349				—				—				—				—				—
Adjusted EBITDA			68,695				66,781				68,689				70,367				72,451				73,758
Less: cash interest expense			17,422				17,436				16,409				17,114				16,662				16,464
Less: Interest expense for JVs			2,565				2,496				2,566				2,605				2,605				2,589
Less: income tax			74				76				78				80				82				84
Less: preferred distributions, NCI and cash tax			12,248				12,240				12,240				12,240				12,240				12,240
Distributable Cash Flow		$	36,386			$	34,533			$	37,328			$	38,328			$	40,862			$	42,380
($ in thousands)		Forecast
Cash Flow Statement		2021				2022				2023				2024				2025				2026
Net cash provided by operating activities		$	44,0424			$	43,788			$	46,672			$	47,672			$	50,258			$	51,778
Net cash used in investing activities			(15,918	)			(2,935	)			(12,837	)			—				—				—
Net cash provided by financing activities			(31,767	)			(40,853	)			(33,835	)			(47,722	)			(50,258	)			(51,778	)

 

30

Non-GAAP Financial Measures

The Partnership defines EBITDA as net income before interest, income taxes, depreciation and amortization, and defines Adjusted EBITDA as EBITDA before impairments, acquisition-related expenses, unrealized and realized gains and losses on derivatives, loss on extinguishment of debt, gains and losses on sale of real property interests, unit-based compensation, straight line rental adjustments, amortization of above- and below-market rents plus cash receipts applied toward the repayments of investments in receivable, the deemed capital contribution to fund the Partnership’s general and administrative expense reimbursement and adjustments for investments in unconsolidated joint ventures.

EBITDA and Adjusted EBITDA are non-GAAP supplemental financial measures that management and external users of the Partnership’s financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

 

•

the Partnership’s operating performance as compared to other publicly traded limited partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;

 

•

the ability of the Partnership to generate sufficient cash to support the Partnership’s decision to make distributions to the Partnership’s unitholders;

 

•

the Partnership’s ability to incur and service debt and fund capital expenditures; and

 

•

the viability of acquisitions and the returns on investment of various investment opportunities.

The Partnership believes that the presentation of EBITDA and Adjusted EBITDA in these financial projections provide useful information in assessing the Partnership’s financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered as an alternative to GAAP net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Each of EBITDA and Adjusted EBITDA has important limitations as analytical tools because they exclude some, but not all, items that affect net income and net cash provided by operating activities, and these measures may vary from those of other companies. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for an analysis of the Partnership’s results as reported under GAAP. As a result, because EBITDA and Adjusted EBITDA may be defined differently by other companies in the Partnership’s industry, EBITDA and Adjusted EBITDA as presented above may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. FFO is a non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO represents net income (loss) excluding real estate related depreciation and amortization expense, real estate related impairment charges, gains (or losses) on real estate transactions, adjustments for unconsolidated joint venture, and distributions to preferred unitholders and noncontrolling interests.

AFFO should not be considered an alternative to net earnings, as an indication of the Partnership’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the Partnership’s performance. The Partnership’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. The Partnership calculates AFFO by starting with FFO and adjusting for general and administrative expense reimbursement, acquisition-related expenses, unrealized gain (loss) on derivatives, straight line rent adjustments, unit-based compensation, amortization of deferred loan costs and discount on secured notes, deferred income tax expense, amortization of above and below market rents, loss on early extinguishment of debt, repayments of receivables, adjustments for investment in unconsolidated joint venture, adjustments for drop-down assets and foreign currency transaction gain (loss). The GAAP measures most directly comparable to AFFO is net income.

 

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Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee

The Conflicts Committee retained Evercore as its financial advisor with respect to the provision of (i) financial advisory services and (ii) an opinion to the Conflicts Committee as to the fairness from a financial point of view to the Partnership Unaffiliated Common Unitholders of the merger consideration to be received by the Partnership Unaffiliated Common Unitholders in the First Partnership Merger. At the request of the Conflicts Committee at its meeting held on August 21, 2021, Evercore rendered its oral opinion to the Conflicts Committee that, as of August 21, 2021, based upon and subject to the assumptions, procedures, qualifications, limitations and other matters considered by Evercore in connection with the preparation of its opinion, the merger consideration to be received by the Partnership Unaffiliated Common Unitholders in the First Partnership Merger is fair, from a financial point of view, to the Partnership Unaffiliated Common Unitholders. Evercore subsequently confirmed its oral opinion in a written opinion (the “Written Opinion”) on the same date.

The opinion speaks only as of the date it was delivered and not as of the time the First Partnership Merger will be completed or any other date. The opinion does not reflect changes that may occur or may have occurred after August 21, 2021, that could alter the facts and circumstances on which Evercore’s opinion was based. It is understood that subsequent events may affect Evercore’s opinion, but Evercore does not have any obligation to update, revise or reaffirm its opinion.

Evercore’s opinion was directed to the Conflicts Committee (in its capacity as such), and only addressed the fairness from a financial point of view, as of the date of the opinion, to the Partnership Unaffiliated Common Unitholders of the merger consideration to be received by the Partnership Unaffiliated Common Unitholders in the First Partnership Merger. Evercore’s opinion did not address any other term or aspect of the Transaction Agreement or the First Partnership Merger. The full text of the Written Opinion, which describes the assumptions made, procedures followed, qualifications and limitations of the review undertaken, and other matters considered by Evercore in rendering its opinion, is attached as Annex B to this proxy statement. The summary of Evercore’s opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of the Written Opinion. However, neither the Written Opinion nor the summary of such opinion and the related analyses set forth in this proxy statement are intended to be, and they do not constitute, a recommendation as to how unitholders of the Partnership or any other person should act or vote with respect to any matter relating to the First Partnership Merger or any related transactions or any other matter.

Evercore’s opinion to the Conflicts Committee was among several factors taken into consideration by the Conflicts Committee in making its recommendation to the Board regarding the First Partnership Merger and related transactions and the Transaction Agreement.

In connection with rendering its opinion, Evercore, among other things:

 

•

reviewed certain publicly available historical business and financial information relating to the Partnership that Evercore deemed relevant, including as set forth in the Annual Report on Form 10-K for the year ended December 31, 2020, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, and certain Current Reports on Form 8-K, in each case as filed with or furnished to the SEC by the Partnership since December 31, 2020;

 

•

reviewed certain internal projected financial and operating data and assumptions relating to the Partnership that were prepared and furnished to Evercore by management of the Partnership (the “LMRK Financial Projections”);

 

•

discussed with management of the Partnership their assessment of the past and current operations of the Partnership, the current financial condition of the Partnership, the prospects of the Partnership, the historical financial and operating data of the Partnership, and the LMRK Financial Projections (including management’s views of the risks and uncertainties of achieving such projections);

 

•

reviewed the reported prices and the historical trading activity of the Common Units;

 

 

32

•

reviewed publicly available research analyst estimates for the Partnership’s future financial performance on a standalone basis;

 

•

performed a discounted cash flow analysis for the Partnership based on forecasts and other data provided by management of the Partnership;

 

•

performed a discounted distribution analysis on the Partnership based on forecasts and other data prepared and furnished to Evercore by management of the Partnership;

 

•

compared the financial performance of the Partnership and its stock market trading multiples with those of certain other publicly traded partnerships and companies that Evercore deemed relevant;

 

•

reviewed the financial metrics of certain historical transactions that Evercore deemed relevant and compared them to the forecasts and other data provided by management of the Partnership;

 

•

reviewed the premiums paid in certain historical transactions that Evercore deemed relevant and compared such premiums to those implied by the proposed First Partnership Merger;

 

•

reviewed the financial terms and conditions included in a draft of the Transaction Agreement, dated August 20, 2021; and

 

•

performed such other analyses and examinations, held such other discussions, reviewed such other information and considered such other factors that Evercore deemed appropriate for the purposes of providing the opinion contained herein.

For purposes of its analysis and opinion, Evercore assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by it, and Evercore assumes no liability therefor. With respect to the LMRK Financial Projections, Evercore assumed that such data was reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the Partnership as to the future financial performance of the Partnership under the assumptions reflected therein. Evercore expresses no view as to the LMRK Financial Projections or the assumptions on which they are based. Evercore relied, at the Conflicts Committee’s direction, without independent verification, upon the assessments of the management of the Partnership as to the future financial and operating performance of the Partnership.

For purposes of its analysis and opinion, Evercore assumed, in all respects material to its analysis, that the executed Transaction Agreement would not differ from the draft form reviewed by Evercore, that the representations and warranties of each party contained in the Transaction Agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the Transaction Agreement and that all conditions to the consummation of the First Partnership Merger would be satisfied without waiver or modification thereof. Evercore assumed that any modification to the structure of the First Partnership Merger would not vary in any respect material to its analysis. Evercore further assumed, in respects material to its analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the First Partnership Merger would be obtained without any delay, limitation, restriction or condition that would have an adverse effect on the Partnership or the consummation of the First Partnership Merger or reduce the contemplated benefits of the First Partnership Merger to the Partnership Unaffiliated Common Unitholders. Evercore assumed that the final versions of all documents reviewed by it in draft form would not differ in any material respect from the drafts reviewed by Evercore.

Evercore did not make, and did not assume any responsibility for making, any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off balance sheet assets and liabilities) of the Partnership, nor was Evercore furnished with any such valuations or appraisals, nor did Evercore evaluate the solvency or fair value of the Partnership under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion is necessarily based upon information made

 

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available to it as of the date of its opinion and financial, economic, market, regulatory and other conditions and circumstances as they then existed and as could be evaluated by Evercore on the date of its opinion. It is understood that subsequent developments may affect the opinion and that Evercore does not have any obligation to update, revise or reaffirm the opinion.

Evercore did not conduct a physical inspection of the properties or facilities of the Partnership and was not asked to pass upon, and expressed no opinion with respect to, any matter other than whether, as of the date of its opinion, the consideration to be received by the Partnership Unaffiliated Common Unitholders in the First Partnership Merger is fair, from a financial point of view, to the Partnership Unaffiliated Common Unitholders. Evercore did not express any view on, and its opinion does not address, the fairness of the First Partnership Merger to, or any consideration received in connection therewith by, any other person, including the holders of any other class of securities, creditors or other constituencies of the Partnership, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Partnership or the Partnership GP, or any class of such persons, whether relative to the consideration or otherwise. Evercore was not asked to, nor did Evercore express any view on, and its opinion does not address, any other term or aspect of the Transaction Agreement or the First Partnership Merger, including, without limitation, the structure or form of the First Partnership Merger or the other transactions contemplated by the Transaction Agreement, or any term or aspect of any other agreement or instrument contemplated by the Transaction Agreement or entered into or amended in connection with the Transaction Agreement. Evercore’s opinion does not address the relative merits of the Transactions as compared to other business or financial strategies that might be available to the Partnership, nor does it address the underlying business decision of the Partnership to engage in the First Partnership Merger. In arriving at its opinion, Evercore was not authorized to solicit, and did not solicit, interest from any third party with respect to the acquisition of any or all of the Common Units or any business combination or other extraordinary transaction involving the Partnership. The letter, and Evercore’s opinion, does not constitute a recommendation to the Conflicts Committee or any other persons in respect of the Transactions, including as to how any holder of Common Units should vote or act in respect of the First Partnership Merger. Evercore expressed no opinion as to the price at which the Common Units will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on the Partnership or the First Partnership Merger or as to the impact of the First Partnership Merger on the solvency or viability of the Partnership or the ability of the Partnership to pay its obligations when they come due. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by the Partnership and its advisors with respect to legal, regulatory, accounting and tax matters.

The following is a summary of the material financial analyses performed by Evercore in connection with the preparation of its opinion and reviewed with the Conflicts Committee on August 21, 2021. Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of the Common Units and the equity securities of the selected companies listed below as of August 21, 2021, and transaction values for the selected transactions analyses described below were calculated on an enterprise value basis based on the value of the equity consideration and other public information available at the time of the relevant transaction’s announcement. The analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed, the tables must be considered together with the textual summary of the analyses.

No company or transaction used in the analyses of companies or transactions summarized below is identical or directly comparable to the Partnership or the First Partnership Merger and related transactions. As a consequence, mathematical derivations (such as the high, low, mean and median) of financial data are not by themselves meaningful, and these analyses must take into account differences in the financial and operating characteristics of the selected publicly traded companies and differences in the structure and timing of the selected transactions and other factors that would affect the public trading value and acquisition value of the companies considered.

 

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Analysis of the Partnership

Assumptions with Respect to the Partnership

Evercore performed its analyses utilizing the LMRK Financial Projections. A summary of the LMRK Financial Projections are available above in “—Unaudited Financial Projections of the Partnership” above. The LMRK Financial Projections were not adjusted by Evercore.

Analysis of the Partnership

Evercore performed a series of analyses to derive indicative valuation ranges for the Common Units and compared each of the resulting valuation ranges to the proposed merger consideration. Evercore performed its analyses utilizing the LMRK Financial Projections.

Discounted Cash Flow Analysis

Evercore performed a discounted cash flow analysis of the Partnership by valuing the cash flows to be received by the Partnership based on the LMRK Financial Projections. Evercore calculated the per unit value range for the Common Units by utilizing a range of discount rates with a mid-point equal to the Partnership’s weighted average cost of capital (“WACC”), as estimated by Evercore based on the Capital Asset Pricing Model (“CAPM”), and terminal values based on a range of estimated EBITDA exit multiples as well as perpetuity growth rates. Evercore assumed a range of discount rates of 6.5% to 7.5% based on the Partnership’s WACC range of 6.6% to 7.2%, a range of EBITDA exit multiples of 13.0x to 17.0x based on Evercore’s peer group trading analysis and a range of perpetuity growth rates of 2.0% to 3.0% based on the Partnership’s compound annual growth rate of projected Adjusted EBITDA from 2022A through 2026A of 2.5%, resulting in an implied equity value per unit range of $9.19 per unit to $25.25 per unit utilizing the LMRK Financial Projections.

Discounted Distribution Analysis

Evercore performed a discounted distribution analysis of the Common Units based on the present value of the future cash distributions to the Partnership Unaffiliated Common Unitholders. The projected distributions utilized by Evercore were based on the LMRK Financial Projections. Evercore assumed (i) a terminal yield range of 6.0% to 7.5% based on trading of the Common Units over the last twelve months, (ii) a cost of equity of 12.5% to 14.5% based on CAPM and (iii) a cost of equity of 10.5% to 12.5% based on expected market total return for peers of the Partnership. Using the LMRK Financial Projections, Evercore determined an implied equity value per unit range of (a) $8.24 per unit to $10.31 per unit using the cost of equity based on CAPM, and an implied equity value per unit range of (b) $8.88 per unit to $11.16 per unit using the cost of equity based on expected market total return.

Precedent M&A Transaction Analysis

Evercore reviewed selected publicly available information for historical transactions involving terminalling assets and businesses announced since December 2017 and selected 14 transactions that involved assets or businesses that Evercore deemed to have certain characteristics similar to those of the Partnership, although

 

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Evercore noted that none of the selected transactions or the selected companies or partnerships that participated in, or assets involved in, the selected transactions were directly comparable to the Partnership:

 

Transaction Industry		Date Announced		Acquiror / Target (Seller)		Relevant Multiple
						Target EV/EBITDA
Data Center		6/7/21		The Blackstone Group Inc. / 28 data centers across North America and Europe (“QTS”, QTS Realty Trust)		29.7x
		5/3/21		Switch, Inc. / 4 data centers in Austin and Houston (“Data Foundry”, Data Foundry, Inc.)		19.0x
		9/29/20		DataBank / 44 data centers across the United States and Europe (“zColo”, Zayo Group Holdings, Inc.)		13.5x
		7/7/20		Colony Capital, Inc. / Stake in 12 North American data centers comprising 150MW of IT capacity (Vantage Data Centers)		21.0x
		6/1/20		Equinix, Inc. / 13 data center sites comprising ~2 million gross square feet of data center space (“Bell”, BCE Inc.)		15.0x
		10/29/19		Digital Realty Trust Inc. / 54 data centers across 11 European countries (“InterXion”, InterXion Holding N.V.)		29.0x
		12/21/17		CyrusOne Inc. / 4 data centers in London and Frankfurt (“Zenium”, Zenium Topco Ltd.)		18.0x
						Target EV/TCF
Communication and Carrier Towers		2/3/21		SBA Communications Corporation / License agreements granting 100-year rights to lease 700+ transmission towers to wireless providers (PG&E Corporation)		24.6x
		11/5/20		American Tower Corporation / InSite Wireless Group, LLC		30.4x
		8/11/20		Vertical Bridge Holdings, LLC / Cumulus Media New Holdings Inc.		14.3x
		7/7/20		Melody Communications Infrastructure Fund II (Melody Investment Advisors LP) / 90% of Uniti Group Inc.		34.0x
						Target EV/EBITDA
Wind Energy Infrastructure		4/19/21		Next Era Energy Partners, LP / 4 long-term contracted wind energy assets located in California and New Hampshire (Brookfield Renewable Partners L.P.)		11.6x
		4/8/21		Atlantica Sustainable Infrastructure / 4 wind energy assets located in Illinois, Texas, Oregon and Minnesota (“Vento II”, OMERS Infrastructure)		5.9x
						Target EV/EBITDA
Outdoor Advertising		12/5/18		Lamar Advertising Company / Fairway Outdoor Advertising billboard operations (GTCR, LLC)		11.6x

Evercore reviewed the EBITDA multiples paid in the selected historical asset transactions and derived a range of relevant implied multiples of market value of equity, plus debt and preferred units, less cash (“Enterprise Value”) to EBITDA of 15.0x to 20.0x for its precedent transactions analysis. Evercore then applied these ranges of selected multiples to estimated 4Q 2021 Annualized EBITDA and estimated 2022 EBITDA. For the value implied by the Enterprise Value to EBITDA multiple, Evercore discounted valuations to a projected September 30, 2021 transaction date using a 7.0% discount rate and subtracted the present value of growth capital expenditures between September 30, 2021 and December 31, 2021 based on the same 7.0% discount rate. Evercore determined an implied equity value per unit range by utilizing the LMRK Financial Projections of $13.83 per unit to $27.27 per unit.

 

36

Peer Group Trading Analysis

Evercore performed a peer group trading analysis of the Partnership by reviewing and comparing the market values and trading multiples of the following 24 publicly traded partnerships and companies that Evercore deemed to have certain characteristics that are similar to those of the Partnership, divided into Master Limited Partnerships and Real Estate Investment Trust Companies:

 

Master Limited Partnerships		Enterprise Value / 2021 EBITDA				Enterprise Value / 2022 EBITDA
Alliance Resource Partners, L.P.			3.2x				3.5x
Calumet Specialty Products Partners, L.P.			13.7x				6.7x
Cheniere Energy Partners, L.P.			12.6x				11.5x
CSI Compressco LP			7.7x				6.5x
CVR Partners, LP			NM				NM
Cypress Environmental Partners, L.P.			NM				NM
Enviva Partners, LP			11.9x				9.6x
Green Plains Partners LP			6.8x				6.8x
Martin Midstream Partners L.P.			6.5x				6.3x
NGL Energy Partners LP			8.7x				7.8x
Suburban Propane Partners, L.P.			7.5x				7.4x
USA Compression Partners, LP			9.5x				8.8x
Westlake Chemical Partners LP			11.2x				12.0x
Real Estate Investment Trusts		Enterprise Value / 2021 EBITDA				Enterprise Value / 2022 EBITDA
Agree Realty Corporation			23.6x				18.8x
CorEnergy Infrastructure Trust, Inc.			13.3x				11.0x
CoreSite Realty Corporation			26.0x				24.1x
Crown Castle International Corp.			27.7x				26.2x
CyrusOne, Inc.			21.9x				20.0x
DigitalBridge			36.1x				32.2x
Essential Properties Trust			24.7x				19.6x
Hannon Armstrong			69.1x				61.0x
Lamar Advertising Company			17.5x				16.4x
OUTFRONT Media Inc.			23.5x				15.2x
SBA Communications Corp.			32.8x				30.9x

Although the peer group was compared to the Partnership for purposes of the analysis, no partnership, trust or company used in the peer group analysis is identical or directly comparable to the Partnership. In order to calculate peer group trading multiples, Evercore relied on publicly available filings with the SEC and other regulatory agencies and equity research analyst estimates.

For each of the peer group partnerships and companies, Evercore calculated the following trading multiples:

 

•

Enterprise Value/2021 EBITDA, which is defined as Enterprise Value, divided by estimated EBITDA for the calendar year 2021; and

 

•

Enterprise Value/2022 EBITDA, which is defined as Enterprise Value divided by estimated EBITDA for the calendar year 2022.

The mean and median trading multiples are set forth below. The table also includes relevant multiple ranges selected by Evercore based on the resulting range of multiples and certain other considerations related to the specific characteristics of the Partnership noted by Evercore.

 

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Benchmark (Master Limited Partnerships)		Mean				Median
Enterprise Value/2021 EBITDA			9.0x				8.7x
Enterprise Value/2022 EBITDA			7.9x				7.4x

 

Benchmark (Real Estate Investment Trusts)		Mean				Median
Enterprise Value/2021 EBITDA			28.7x				24.7x
Enterprise Value/2022 EBITDA			25.0x				20.0x

 

Benchmark		Reference Range
Enterprise Value/2021 EBITDA			13.0x-17.0x
Enterprise Value/2022 EBITDA			13.0x-17.0x

Utilizing the multiples illustrated above, Evercore determined an implied equity value per unit range of $8.59 per unit to $19.36 per unit using the LMRK Financial Projections.

Premiums Paid Analysis

Evercore also reviewed selected publicly available information for historical premiums paid in MLP acquisitions since January 2017 in (i) all transactions generally, and (ii) cash transactions specifically. Such analysis and presentation were prepared for reference only and are illustrative and presented for informational purposes only. Evercore considered that historically, merger and cash transaction premiums have varied widely based on specific considerations with respect to each transaction, with a range for cash transactions of (8.6%) to 63.7% premium to the one-day trailing price and a median premium for cash transactions of (i) 20.1% to the one-day trailing price, (ii) 9.8% to the 30-day trailing price and (iii) 13.4% to the 60-day trailing price, and a range for all transactions of (8.6%) to 65.4% premium to the one-day trailing price and a median premium for all transactions of (i) 13.5% to the one-day trailing price, (ii) 14.9% to the 30-day trailing price and (iii) 13.5% to the 60-day trailing price. Evercore noted that none of the selected transactions or the selected MLPs or companies that participated in the selected transactions was directly comparable to the First Partnership Merger and related transactions of the Partnership.

The selected transactions and resulting minimum, maximum, mean and median data were as follows:

 

Date Announced		Acquiror (s) / Target
3/5/21		Chevron Corporation / Noble Midstream Partners LP
12/15/20		TC Energy Corporation / TC PipeLines, LP
7/27/20		CNX Resources Corporation / CNX Midstream Partners
2/27/20		Equitrans Midstream Corporation / EQM Midstream Partners, LP
12/17/19		Blackstone Infrastructure Partners / Tallgrass Energy LP
10/1/19		Brookfield Business Partners L.P. / Teekay Offshore Partners L.P.
9/16/19		Energy Transfer LP / SemGroup Corporation
8/21/19		Pembina Pipeline Corporation / Kinder Morgan Canada Limited
5/10/19		IFM Investors / Buckeye Partners, L.P.
5/8/19		MPLX LP / Andeavor (Marathon Petroleum Corporation; Andeavor Logistics LP)
4/2/19		UGI Corporation / AmeriGas Partners, L.P.
3/18/19		ArcLight Energy Partners Fund V, L.P. / American Midstream, LP
2/5/19		SunCoke Energy, Inc. / SunCoke Energy Partners, L.P.
11/26/18		Dominion Energy, Inc. / Dominion Energy Midstream Partners, LP
11/26/18		ArcLight Energy Partners Fund VI, L.P. / TransMontaigne Partners L.P.
11/8/18		Western Gas Equity Partners, LP / Western Gas Partners, LP
10/22/18		EnLink Midstream, LLC / EnLink Midstream Partners, LP
10/18/18		Valero Energy Corporation / Valero Energy Partners LP

 

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Date Announced		Acquiror (s) / Target
10/9/18		Antero Midstream GP LP / Antero Midstream Partners LP
8/1/18		Energy Transfer Equity, L.P. / Energy Transfer Partners, L.P.
6/9/18		Cheniere Energy, Inc. / Cheniere Energy Partners LP Holdings, LLC
5/17/18		The Williams Companies, Inc. / Williams Partners L.P.
5/17/18		Enbridge Inc. / Enbridge Energy Partners, L.P.
5/17/18		Enbridge Inc. / Spectra Energy Partners, LP
3/26/18		Tallgrass Energy GP, LP / Tallgrass Energy Partners, L.P.
2/8/18		Nustar Energy L.P. / Nustar GP Holdings, LLC
1/2/18		Archrock, Inc. / Archrock Partners, L.P.
6/2/17		World Point Terminals, Inc. / World Point Terminals, LP
5/18/17		Energy Transfer Partners, LP / PennTex Midstream Partners, LP
3/2/17		VTTI B.V. / VTTI Energy Partners LP
2/1/17		ONEOK, Inc. / ONEOK Partners, L.P.
1/27/17		Enbridge Energy Co, Inc. / Midcoast Energy Partners, L.P.

 

		Cash-for-Unit / Stock Only Transactions
		1-Day				30-Day				60-Day
Median			20.1	%			9.8	%			13.4	%
Mean			22.6	%			13.6	%			15.3	%
Max			63.7	%			32.0	%			32.1	%
Min			(8.6	%)			3.4	%			3.2	%

 

		All Transactions
		1-Day				30-Day				60-Day
Median			13.5	%			14.9	%			13.5	%
Mean			17.8	%			16.2	%			15.5	%
Max			65.4	%			80.2	%			62.1	%
Min			(8.6	%)			(11.2	%)			(16.8	%)

Based on the relevant median premiums, Evercore calculated implied equity value per unit ranges of: (i) $13.53 to $14.13 for all transactions and (ii) $13.36 to $14.32 for cash transactions.

Other Presentations by Evercore

In addition to the presentation made to the Conflicts Committee on August 21, 2021, the date on which Evercore delivered its fairness opinion, as described above, Evercore made other written and oral presentations to the Conflicts Committee on July 22, 2021, July 30, 2021, and August 2, 2021, which are referred to as the preliminary Evercore presentations. Copies of the preliminary Evercore presentations have been attached as exhibits to the transaction statement on Schedule 13E-3 filed with the SEC with respect to the proposed First Partnership Merger. These written presentations will be available for any interested unitholder of the Partnership to inspect and copy at the Partnership’s executive offices during regular business hours.

None of these other written and oral presentations by Evercore, alone or together, constitutes an opinion of Evercore with respect to the merger consideration. The information contained in the written and oral presentations made to the Conflicts Committee on July 22, 2021, July 30, 2021, and August 2, 2021 is substantially similar to the information provided in Evercore’s written presentation to the Conflicts Committee on August 21, 2021, as described above.

Each of the analyses performed in these preliminary Evercore presentations was subject to further updating and subject to the final analyses presented to the Conflicts Committee on August 21, 2021 by Evercore. Each of

 

39

these analyses was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Evercore as of, the dates on which Evercore performed such analyses. Accordingly, the results of the financial analyses may have differed due to changes in those conditions and other information, and not all of the written and oral presentations contained all of the financial analyses included in the August 21, 2021 presentation.

The July 22, 2021 presentation referenced, for informational purposes, among other things, (i) the Common Unit price performance during the period of July 19, 2020 to July 19, 2021, (ii) an overview of the Partnership including historical and projected annual revenue by business segment from 2016 through 2026, (iii) selected Wall Street research analysts’ price targets for the Common Units, (iv) the 15 largest institutional unitholders and five largest insider unitholders of the Partnership as of July 19, 2021, (v) a review of the Partnership’s financial projections from 4Q 2021 through 2026, (vi) a review of the Partnership’s projected growth projects including a comparison of growth projects that were previously provided to the Board in materials delivered in April 2021, (vii) a review of the Partnership’s historical and projected general and administrative expenses and customer churn, (viii) a preliminary discounted cash flow analysis of the Common Units resulting in a price range of $8.84 to $24.73, (ix) a preliminary discounted distribution analysis of the Common Units resulting in a price range of $8.55 to $12.10, (x) a preliminary precedent M&A transaction analysis of the Partnership resulting in a Common Unit price range of $13.44 to $26.89 and (xi) a preliminary peer group trading analysis of the Partnership resulting in a Common Unit price range of $8.29 to $21.63.

The July 30, 2021 presentation referenced, for informational purposes, updates to the July 22, 2021 presentation including, among other things, (i) updated count of outstanding Common Units and inclusion of the Series C Preferred Units at liquidation preference value in the illustrative capital structure summary, (ii) updated Partnership financial projections from 4Q 2021 through 2026 as provided by Partnership management, (iii) additional analysis of select growth projects, general and administrative expenses and customer churn, (iv) a review of the Partnership’s historical and projected distribution coverage, (v) a review of select financial projection sensitivities and the corresponding effects on the Partnership’s projected financial performance and Evercore’s preliminary valuation of the Partnership, (vi) an updated preliminary discounted cash flow analysis of the Common Units resulting in a price range of $8.80 to $24.86 and (vii) an updated preliminary peer group trading analysis of the Partnership resulting in a Common Unit price range of $8.20 to $18.97.

The August 2, 2021 presentation referenced, for informational purposes, updates to the July 29, 2021 presentation including, among other things, (i) updated Partnership financial projections from 4Q 2021 through 2026 as provided by Partnership management, (ii) additional analysis of select growth projects, general and administrative expenses, customer churn and historical and projected distribution coverage, (iii) an updated review of select financial projection sensitivities and the corresponding effects on the Partnership’s projected financial performance and Evercore’s preliminary valuation of the Partnership, (iv) an updated preliminary discounted cash flow analysis of the Common Units resulting in a price range of $9.19 to $25.25, (v) an updated preliminary precedent M&A transaction analysis of the Partnership resulting in a Common Unit price range of $13.83 to $27.27 and (vi) an updated preliminary peer group trading analysis of the Partnership resulting in a Common Unit price range of $8.59 to $19.36.

General

Evercore and its affiliates engage in a wide range of activities for their own accounts and the accounts of customers. In connection with these businesses or otherwise, Evercore and its affiliates and/or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products relating to the Partnership and its affiliates.

Evercore and its affiliates also engage in securities trading and brokerage, private equity and investment management activities, equity research and other financial services, and in the ordinary course of these activities,

 

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Evercore and its affiliates may from time to time acquire, hold or sell, for their own accounts and for the accounts of their customers, (i) equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of the Partnership and (ii) any currency or commodity that may be involved in the First Partnership Merger and related transactions and the other matters contemplated by the Transaction Agreement.

Evercore and its affiliates and certain of its employees, including members of the team performing services in connection with the First Partnership Merger and related transactions, as well as certain private equity or other investment funds associated or affiliated with Evercore in which they may have financial interests, may from time to time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the Partnership, other actual or potential transaction participants and their respective affiliates.

The Conflicts Committee selected Evercore to provide financial advice in connection with its evaluation of the First Partnership Merger because of, among other reasons, Evercore’s experience, reputation and its investment banking professionals’ experience in transactions similar to the First Partnership Merger.

Copies of written materials provided to the Conflicts Committee by Evercore have been filed as exhibits to the Schedule 13E-3 filed by the Partnership with the SEC in connection with the Transactions and related transactions.

Evercore’s opinion was furnished for the use of the Conflicts Committee (in its capacity as such) in connection with the Conflicts Committee’s evaluation of the First Partnership Merger, and may not be used for any other purpose without Evercore’s prior written consent. Evercore’s opinion was not intended to be, and did not constitute, a recommendation to the Conflicts Committee, the Board, any security holder, or any other party as to how to act or vote with respect to any matter relating to the merger or otherwise. Evercore has consented to the inclusion in the Schedule 13E-3 and this proxy statement of its opinion in its entirety and the description thereof and the related disclosure content.

The preliminary Evercore presentations and final presentation, as set out in Exhibits (c)-(2) through (5) to the Schedule 13E-3, were prepared by Evercore for the information of the Conflicts Committee in connection with the Conflicts Committee’s consideration of the First Partnership Merger. Subject to the assumptions and qualifications set forth in the Evercore presentations, the Partnership Unaffiliated Unitholders may rely upon the information disclosed in the Evercore presentations. Evercore has consented to the inclusion of the Evercore presentations in their entirety as exhibits to the Schedule 13E-3.

The description set forth above constitutes a summary of the analyses employed and factors considered by Evercore in rendering its opinion to the Conflicts Committee. The preparation of a fairness opinion is a complex, analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and is not necessarily susceptible to partial analysis or summary description.

Pursuant to the terms of the engagement of Evercore, Evercore will receive a fee of $2,500,000 for its services, of which $250,000 became payable upon the execution of its engagement, $1,250,000 became payable upon delivery of its opinion on August 21, 2021, and $1,000,000 will become payable upon successful completion of the proposed First Partnership Merger. In addition, the Partnership has agreed to reimburse certain of Evercore’s expenses and indemnify Evercore and certain related parties against certain liabilities arising out of its engagement. At the conclusion of the assignment, Evercore may receive an additional discretionary fee in an amount not to exceed $250,000, based upon, among other things, the resources expended by Evercore in the course of the assignment, the Conflict Committee’s satisfaction with the services rendered and the benefit to the Partnership of the successful conclusion of the assignment; provided, however, that the amount of any such discretionary payment, if any, shall be determined by the Conflicts Committee in its sole and absolute discretion.

 

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During the two-year period prior to the date hereof, Evercore Group L.L.C. and its affiliates have not been engaged to provide financial advisory or other services to the Conflicts Committee, on behalf of the Partnership, and Evercore has not received compensation from Partnership GP, the Partnership, or Digital Colony Acquisitions, LLC during such period. Evercore may provide financial advisory or other services to the Partnership, Partnership GP and Digital Colony Acquisitions, LLC or its affiliates in the future, and in connection with any such services it may receive compensation, except that, until Evercore’s engagement by the Conflicts Committee terminates, Evercore may not provide such services to the Partnership GP, Landmark Dividend or certain affiliates of Digital Colony Acquisitions, LLC, in each case, without the prior written consent of the Conflicts Committee.

Position of the Buyer Parties as to the Fairness of the Transactions

Under the SEC rules governing “going private” transactions, each of the Buyer Parties is an Affiliate of the Partnership that is engaged in the “going private” transaction and, therefore, is required to express its position as to the fairness of the Transactions to the Partnership’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Buyer Parties are making the statements included in this section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Buyer Parties as to the fairness of the Transactions (which is the Rule 13e-3 transaction for which a Schedule 13E-3 was filed with the SEC) should not be construed as a recommendation to any Partnership Unaffiliated Unitholder as to how such unitholder should vote on the proposal to approve the Transaction Agreement.

The Buyer Parties did not undertake an independent evaluation of the fairness of the Transactions to the Partnership Unaffiliated Unitholders or to the holders of Preferred Units or engage a financial advisor for such purpose. However, based on the procedural safeguards implemented during the negotiation of the Transaction Agreement, which included the delegation by the Board to the Conflicts Committee of the full power, authority and responsibilities of the Board to, on behalf of the Partnership, the Partnership Unaffiliated Unitholders and the Partnership GP in its capacity as general partner of the Partnership, to, among other things, (a) review, consider and evaluate the Transactions and the terms and conditions of the Transactions and any agreements and arrangements related thereto on behalf of the Partnership and the Partnership Unaffiliated Unitholders, (b) negotiate the terms and any documentation of the Transactions and related agreements directly with each of DigitalBridge and its affiliates and/or the Partnership’s management and the counsel and advisors to each of them, as it deemed necessary, appropriate or advisable, in its sole discretion, (c) consult with, advise and/or direct management of the Partnership in connection with discussions and/or negotiations concerning potential terms and conditions of the Transactions and related agreements, (d) determine whether the Transactions and related agreements were in the best interests of the Partnership, (e) determine whether to recommend that the Board approve or not approve, as applicable, the Transactions and related agreements, with any such approval and related recommendation of the Conflicts Committee constituting “Special Approval” for all purposes under the Partnership Agreement, including Section 7.9(b) thereof, with respect to the Transactions and related agreements and (f) make a recommendation to the Board whether it should (i) approve the Transactions and related agreements and (ii) recommend the Transactions to the Partnership Unaffiliated Unitholders, with the Board, acting for and on behalf of the Partnership GP in its capacity as the general partner of the Partnership, ultimately making a determination to approve or not approve the Transactions and agreements on behalf of the Partnership, and the other factors considered by the Buyer Parties in the section entitled “—The Buyer Parties’ Purpose and Reasons for the Transactions,” the Buyer Parties believe that the Transactions are substantively and procedurally fair to the Partnership Unaffiliated Unitholders. The Buyer Parties expressly adopted the analysis of the Conflicts Committee, which expressly adopted the analyses and opinion of Evercore, among other factors considered, in the course of reaching its decision that the Transactions are substantively and procedurally fair to the Partnership Unaffiliated Unitholders and the holders of Preferred Units. The Buyer Parties believe that the Transactions are substantively and procedurally fair to the holders of Preferred Units, as Preferred Units will be entitled to receive in the Transaction the exact consideration the holders of such Preferred Units would have received had they instead been redeemed rather than cashed out in the Transaction. For additional information, see “The Transaction Agreement—The Transactions Consideration.”

 

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The Buyer Parties did not consider net book value, which is an accounting concept, for purposes of determining the fairness of the Transactions Consideration to the Partnership Unaffiliated Unitholders or of the Preferred Units Consideration because, in the Buyer Parties’ view, net book value is indicative of neither the Partnership’s market value nor its value as a going concern, but rather is an indicator of historical costs. The Buyer Parties did not consider the liquidation value of the Partnership for purposes of determining the fairness of the Transactions Consideration to the Partnership Unaffiliated Unitholders and of the Preferred Units Consideration to the holders of Preferred Units because it considered the Partnership to be a viable, going concern and therefore did not consider liquidation value to be a relevant methodology. The Buyer Parties did not conduct a going-concern valuation of the Partnership in evaluating the Transactions because of their belief that the financial analyses presented by Evercore to the Conflicts Committee, as more fully summarized below in the section entitled “Opinion of Evercore Group L.L.C.—Financial Advisor to the Conflicts Committee,” included potential valuations of the Partnership as it continues to operate its business as a going concern.

The foregoing discussion of the information and factors considered and given weight by the Buyer Parties is not intended to be exhaustive, but includes the factors considered by the Buyer Parties that each believes to be material to the fairness determination regarding the fairness of the Transactions for the purpose of complying with the requirements of Rule 13e-3 and the related rules under the Exchange Act. The Buyer Parties did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the Transactions. Rather, the Buyer Parties made their fairness determination after considering all of the factors as a whole.

The Buyer Parties’ Purpose and Reasons for the Transactions

Under the SEC rules governing “going private” transactions, each of the Buyer Parties is an Affiliate of the Partnership that is engaged in the “going private” transaction and, therefore, each is required to express its purposes and reasons for the Transactions to the Partnership’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Buyer Parties are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

If the Transactions are completed, (a) all of the assets of the Partnership Parties will be owned by LM Infra, (b) the holders of Common Units and Preferred Units will no longer have an equity interest in the Partnership, (c) the Common Units and the Preferred Units will no longer be listed on the NASDAQ Global Market and cease to exist and (d) the registration of the Common Units and the Preferred Units under the Exchange Act will be terminated. For the Buyer Parties, the purpose of the Transactions is to effectuate the transactions contemplated by the Transaction Agreement and to bear the rewards and risks of such ownership after the Common Units and Preferred Units cease to be publicly traded and cease to exist. The Buyer Parties did not consider any alternatives for achieving these purposes.

The Buyer Parties believe that the Partnership could operate more efficiently and effectively as a private entity free from the pressures imposed on a publicly traded partnership. In particular, the Buyer Parties believe that telecom infrastructure assets are ill-suited to management through a master limited partnership structure, support for which can be seen by the disparities in stock prices between master limited partnerships managing telecom assets and REIT structures managing such assets. The Transaction Proposal, in the belief of the Buyer Parties, offers Unitholders and holders of Preferred Units greater certainty of value in exchange for the opportunity to eventually optimize the business under such an internally managed structure. Additionally, the Buyer Parties also believe the Transaction Proposal advantageously situates Unitholders and holders of Preferred Units to avoid increased general and administrative expenses as certain cost reimbursement mechanisms fall away over time. Further, the Buyer Parties considered what they believed were competitive advantages of the Partnership’s ceasing to exist and the assets ceasing to be owned by a public entity, including less transparency to competitors. Finally, absent the reporting and other substantial burdens placed on public entities, the Buyer Parties believe that the management and employees of Landmark Dividend will be able to better execute on its future strategic plans due to increased time and narrowed focus.

 

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The Buyer Parties have undertaken to pursue the Transactions at this time for the reasons described above, as well as due to the Buyer Parties’ desire to maximize long-term investment returns for their partners.

Although the Buyer Parties believe that there will be certain opportunities associated with their ownership of the assets of the Partnership if the Transactions are completed, the Buyer Parties realize that there are also substantial risks (including the risks and uncertainties relating to the prospects of the Partnership) and that such opportunities may never be fully realized.

The Buyer Parties believe that a merger transaction is preferable to other transaction structures because the Transactions, including the First Partnership Merger and the Second Partnership Merger (a) will enable Buyer Parties to acquire all of the outstanding Common Units not owned by Landmark Dividend at the same time and all of the assets owned by the Partnership, (b) will enable the Buyer Parties to redeem all of the outstanding Preferred Units at the same time and (c) represents an opportunity for the Partnership Unaffiliated Unitholders to receive price certainty at a premium for their Common Units in the form of the Partnership Unaffiliated Unitholders Consideration based on the Partnership Unaffiliated Unitholders Consideration representing a premium of approximately (i) 38% to the $11.92 unaffected closing price on May 14, 2021, the last business day prior to the announcement of Landmark Dividend’s proposed acquisition of the Partnership for $13.00 per Common Unit and (ii) 16.5% to the $14.16 closing price per Common Unit on August 20, 2021, the last trading day before the announcement of the Transactions. Further, the Buyer Parties believe that the Transactions are substantively and procedurally fair to the holders of Preferred Units, as Preferred Units will be entitled to receive in the Transaction the exact consideration the holders of such Preferred Units would have received had they instead been redeemed rather than cashed out in the Transaction. For additional information, see “The Transaction Agreement—The Transactions Consideration.” Furthermore, the Buyer Parties believe that structuring the transaction as a merger transaction provides the most prompt payment to all of the Partnership Unaffiliated Unitholders in light of anticipated timing to obtain requisite regulatory approvals and the absence of a short form merger statute that would allow the Partnership to avoid the need to hold the Partnership Unitholder Meeting even if the Buyer Parties acquired a majority of the Common Units in a tender offer.

Effects of the Transactions

If the Transactions are completed, (a) at the effective time of the First Partnership Merger (the “First Partnership Merger Effective Time”), (i) each issued and outstanding Common Unit, other than the Landmark Dividend Common Units, will be converted into the right to receive $16.50 per Common Unit in cash without any interest thereon, (ii) each issued and outstanding Series A Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series A Preferred Unit in cash without any interest thereon, (iii) each issued and outstanding Series B Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series B Preferred Unit in cash without any interest thereon and (iv) each issued and outstanding Series C Preferred Unit will be converted into the right to receive the greater of (1) $25.00 plus the amount of any accumulated and unpaid distributions per Series C Preferred Unit to, but not including, the date of the First Partnership Merger Effective Time plus the amount of any distributions that would have accrued from the date of the First Partnership Merger Effective Time to, but not including, the 50th Business Day following the First Partnership Merger Effective Time and (2) the sum of (A) the product of (x) the Alternative Conversion Amount multiplied by (y) Partnership Unaffiliated Unitholders Consideration plus (B) the amount of any accumulated and unpaid distributions for all prior Series C Distribution Periods ending on or prior to the 20th Business Day following the First Partnership Merger Effective Time, per Series C Preferred Unit in cash without any interest thereon, (b) all of the Common Units converted into the right to receive the Partnership Unaffiliated Unitholders Consideration will no longer be outstanding and will automatically be cancelled and cease to exist, (c) all of the assets of the Partnership Parties will be owned by LM Infra, (d) the holders of Common Units and Preferred Units will no longer have an equity interest in the Partnership, (e) the Common Units and the Preferred Units will no longer be listed on the NASDAQ Global Market and cease to exist and (f) the registration of the Common Units and the Preferred Units under the Exchange Act will be terminated.

 

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At the effective time of the Second Partnership Merger, each issued and outstanding Landmark Dividend Common Unit and all Incentive Distribution Rights (as defined in the Partnership Agreement) will be converted into the right for Landmark Dividend or its affiliates to receive a certain promissory note in an amount specified by LM DV Infra and the General Partner Interest (as defined in the Partnership Agreement) will be cancelled and retired and will cease to exist. No consideration will be delivered for such cancelled General Partner Interest.

At the Second Partnership Merger Effective Time the Partnership will merge with and into Merger Sub, the separate existence of the Partnership will cease and Merger Sub will survive and continue to exist as a Delaware limited liability company and all the property, rights, privileges and powers of the Partnership will vest in Merger Sub, and all debts, liabilities and duties of the Partnership will become the debts, liabilities and duties of Merger Sub

Landmark Dividend owns, in the aggregate, (a) 5,066,408 Common Units, which represents approximately 19.9% of the total outstanding Common Units as of June 30, 2021, (b) all of the General Partner Interests and (c) all of the Incentive Distribution Rights. Landmark Dividend also owns 100% of the membership interests in the Partnership GP. Landmark Dividend does not own any of the Preferred Units. Subject to certain limitations in the Transaction Agreement with respect to members of the Conflicts Committee, Landmark Dividend has the right to appoint and remove all of the members of the Partnership GP board of directors. Thus, Landmark Dividend has a controlling interest in the Partnership GP, which manages the operations and activities of the Partnership.

The Partnership’s net book value (calculated as total assets minus total liabilities) as of December 31, 2020 was approximately $371.4 million, and the Partnership’s net income for the fiscal year ended December 31, 2020 was $29.1 million. As of December 31, 2020, Landmark Dividend owned, in the aggregate, 3,360,308 Common Units, which represents approximately 13.2% of the total outstanding Common Units as of December 31, 2020, representing an effective beneficial ownership by Landmark Dividend as of December 31, 2020, of 13.2% of the Partnership’s net book value attributable to such Common Units ($49.6 million), which in combination with Landmark Dividend also owning the all of the General Partner Interest in the Partnership and all of the Incentive Distribution Rights, represented an effective beneficial ownership by Landmark Dividend attributable to approximately 7.5% of the Partnership’s net income for the fiscal year ended December 31, 2020 ($2.2 million). If the Transactions are consummated, the Buyer Parties, as affiliates of Landmark Dividend will have beneficial ownership of 100% of the Partnership’s net book value and net earnings, through their ownership of all of the assets of the Partnership, having an aggregate beneficial interest in the Partnership’s net book value and net income of $371.4 million and $29.1 million, respectively (based on the Partnership’s December 31, 2020 financial data). The Buyer Parties will also be entitled to any future increase in the value and all income generated by the Partnership’s assets and operations going forward.

Primary Benefits and Detriments of the Transactions

Benefits and Detriments to Unitholders

The primary benefits of the Transactions to the holders of Common Units and Preferred Units that will not have a continuing interest in the Partnership following the Transactions include the following:

 

•

The receipt by such holders of Common Units of $16.50 in cash per Common Unit held by them, without any interest thereon, representing a premium of approximately (a) 38% to the $11.92 unaffected closing price on May 14, 2021, the last business day prior to the announcement of Landmark Dividend’s proposed acquisition of the Partnership for $13.00 per Common Unit and (b) 16.5% to the $14.16 closing price per Common Unit on August 20, 2021, the last trading day before the announcement of the Transactions.

 

•

The receipt by such holders of Preferred Units of the exact consideration the holders of such Preferred Units would have received had they instead been redeemed rather than cashed out in the Transaction.

 

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•

The avoidance of all downside risk associated with the continued ownership of Common Units or Preferred Units, including any possible decrease in the future revenues and free cash flow, growth or value of the Partnership following the Transactions.

The primary detriment of the Transactions to the holders of Common Units and Preferred Units that will not have a continuing interest in the Partnership following the Transactions include the following:

 

•

Such holders will cease to have an interest in the Partnership and, therefore, will no longer benefit from possible increases in the future revenues and free cash flow, growth or value of the assets of the Partnership.

 

•

In general, the Second REIT Merger will be treated as a taxable event by the Partnership. The First Partnership Merger combined with the Second Partnership Merger will be part of a plan of liquidation of the Partnership where holders of Common Units will receive distributions of cash in liquidation of their Common Units. The Second REIT Merger and/or the distribution of cash to holders of Common Units in the First Partnership Merger may subject holders of Common Units to United States federal income tax depending on such holder’s own tax situation. Accordingly, you are strongly urged to consult your own tax advisor for a full understanding of the particular tax consequences of the Transactions to you.

Please read “Certain Material United States Federal Income Tax Consequences” for a more complete discussion of certain material United States federal income tax consequences to holders of Common Units of the Second REIT Merger and the receipt of cash by such holders in the First Partnership Merger.

Benefits and Detriments to the Partnership, the Buyer Parties and Landmark Dividend

The primary benefits of the Transactions to the Partnership, the Buyer Parties and Landmark Dividend include the following:

 

•

If Buyer Parties successfully execute their business strategy, the value of the equity investment of the affiliates of Landmark Dividend could increase because of possible increases in future revenues and free cash flow, increases in the underlying value of the assets formerly owned by the Partnership or the payment of distributions, if any, that would accrue to the affiliates of Landmark Dividend.

 

•

The Partnership, which will cease to exist, will no longer have continued pressure to meet quarterly forecasts set by analysts. In contrast, as a publicly traded company, the Partnership currently faces public unitholders and investment analyst pressure to make decisions that may produce better short-term results, but which may not over the long-term lead to a maximization of their equity value.

 

•

The Buyer Parties will have more flexibility to change capital spending strategies without public market scrutiny or analysts’ quarterly expectations.

 

•

The directors, officers and beneficial owners of more than 10% of the Common Units will be relieved of the reporting requirements and liabilities for short-swing profit recovery under Section 16 of the Exchange Act.

The primary detriments of the Transactions to the Partnership and the Buyer Parties include the following:

 

•

Following the Transactions, there will be no trading market for the equity securities of Merger Sub, as the surviving entity.

 

•

The risk that potential benefits sought in the Transactions may not be realized.

 

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Interests of Certain Persons in the Transactions

General

In considering the recommendation of the Conflicts Committee with respect to the Transactions Proposal, the Unitholders and holders of Preferred Units should be aware that certain of the executive officers and directors of the Partnership GP have interests in the transaction that differ from, or are in addition to, the interests of the holders of Common Units and Preferred Units generally. These interests are summarized below.

The members of the Conflicts Committee were aware of these interests and the relationships described below and considered them in making their determinations and recommendations with respect to the Transaction Agreement and the Transactions. These interests and relationships, to the extent material, are further described below. For additional information, please read “—Background of the Transactions,” and “—Reasons for the Conflicts Committee’s Recommendation.”

Equity Interests of Directors and Executive Officers in the Partnership GP

Certain Partnership GP executive officers and directors own Common Units, as further described below in “Security Ownership of Certain Beneficial Owners, Management, Landmark Dividend and the Buyer Parties—Ownership of Landmark Infrastructure Partners LP by the Partnership GP’s Directors and Officers.” All Common Units held by the Partnership GP executive officers and directors will be converted into the Partnership Unaffiliated Unitholders Consideration in connection with the Transactions.

The following tables set forth certain information regarding the beneficial ownership of Common Units as of September 7, 2021 owned by:

 

•

the named executive officers of the Partnership GP;

 

•

each of the directors of the Partnership GP; and

 

•

all the directors and executive officers of the Partnership GP as a group.

 

Name of Beneficial Owner		Positions with the Partnership GP		Common Units Beneficially Owned(1)				Percentage of Common Units Beneficially Owned
Arthur P. Brazy, Jr.		Chief Executive Officer and Director			180,872				*
George P. Doyle		Chief Financial Officer and Treasurer			19,439				*
Keith Benson		Director			10,195				*
Thomas Carey White III		Director			20,541				*
Gerald A. Tywoniuk		Director			19,371				*
Steven Sonnenstein		Chairman of the Board of Directors			—				—
Sadiq Malik		Director			—				—
All Directors and Executive Officers as a group (7 persons)					250,418				*

 

*	Less than 1%.

(1)

Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of a security as to which that person, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares voting power and/or investment power of such security and as to which that person has the right to acquire beneficial ownership of such security within 60 days.

Such persons do not own any Preferred Units.

 

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The following tables set forth certain information regarding the beneficial ownership of Common Units as of September 7, 2021 owned by:

 

•

each of the former directors of the Partnership GP who was a director at any time since December 31, 2020:

 

Name of Beneficial Owner		Positions with the Partnership GP		Common Units Beneficially Owned(1)				Percentage of Common Units Beneficially Owned
Matthew P. Carbone(2)		Former Chairman of the Board of the Directors			19,853				*
James F. Brown(2)		Former Director			—				—
Edmond G. Leung(2)		Former Director			3,410				*
All Former Directors as a group (3 persons)					23,263				*

 

*	Less than 1%.

(1)

Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of a security as to which that person, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares voting power and/or investment power of such security and as to which that person has the right to acquire beneficial ownership of such security within 60 days.

(2)	In connection with the consummation of the Sponsor Acquisition, Matthew P. Carbone, Edmond G. Leung and James F. Brown stepped down from their respective roles as members of the Board on June 2, 2021.

Such persons do not own any Preferred Units.

Treatment of Equity Awards

Immediately prior to the First Partnership Merger Effective Time, each award of Equity Participation Units issued under the Partnership LTIP then outstanding and unsettled will be settled by a cash payment equal to the Partnership Unaffiliated Unitholders Consideration per Equity Participation Unit and, solely to the extent provided in the applicable award agreement and unpaid, an additional cash payment equal to product of (a) the number of outstanding Equity Participation Units and (b) the value of any distribution equivalent rights. No Equity Participation Units are currently outstanding. Equity Participation Units were only granted to independent directors of the Board at the time of grant with such grants (usually made in January of each year) being vested upon grant and immediately settled in Common Units.

Director and Officer Insurance; Indemnification

From and after the Closing, the Buyer Parties and the surviving entity have agreed to indemnify and hold harmless any person who is or was, or at any time prior to the Closing Date (i) becomes, an officer, director or manager of any Partnership Entity or (ii) serves, at the request of any Partnership Entity as an officer, director, member, general partner, fiduciary or trustee of another person (each, a “Covered Person”) from and against any and all losses, claims, damages, liabilities, expenses, judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened, pending, or completed claims, demands, actions, suits or proceedings, relating to or arising out of the Transaction Agreement, the other transaction documents or the Transactions, in which any such Covered Person may be involved by reason of its status as a Covered Person and acting (or omitting or refraining to act) in such capacity on behalf of or for the benefit of the Partnership. The Buyer Parties and the surviving entity have also agreed to advance to any such Covered Person expenses (including legal fees and expenses) incurred by such Covered Person in connection therewith. The rights to indemnification and advancement of expenses described in this paragraph are limited to the extent provided in, and in accordance with, the organizational documents of the Partnership Entities as of the date of execution of the Transaction Agreement.

 

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Additionally, the Buyer Parties have agreed to, for a period of six years following the Closing Date (or until the disposition of claims for indemnification or advancement asserted during such six-year period):

 

•

cause each Partnership Entity and the surviving entity to honor and maintain in effect all rights to indemnification, exculpation and advancement of expenses, elimination of liability and exculpation from liabilities existing in favor of any Covered Person as provided in the organizational documents of any Partnership Entity as in effect on the date of execution of the Transaction Agreement or pursuant to any other agreements set forth in the disclosure schedules delivered by the Partnership;

 

•

refrain, and to refrain from causing or permitting any Partnership Entity or the surviving entity to, amend, restate, waive or terminate any organizational documents of any Partnership Entity in any manner that would adversely affect the indemnification or exculpation rights of any Covered Person; and

 

•

maintain fiduciary liability coverage for acts, events, occurrences or omissions occurring or arising at or prior to the Closing Date that is no less advantageous to each Covered Person than existing officers’ and directors’ liability insurance policies as of the date of execution of the Transaction Agreement, except that Buyer Parties and the Partnership Entities will not be required to pay an annual premium in excess of 300% of the current annual premium, but will purchase as much of such coverage as possible for such applicable amount.

In the event that any Buyer Party or any Partnership Entity consolidates with or merges into any other entity and is not the continuing or surviving entity of such consolidation or merger or transfers all or substantially all of its properties and assets to any person or entity (whether by consolidation, merger or otherwise), then, and in each such case, proper provision will be made so that such continuing or surviving entity or transferee of such assets, as the case may be, assumes the obligations described in this section.

All of the directors of the Partnership GP have the right to indemnification pursuant to the terms of the Partnership Agreement and the limited liability company agreement of the Partnership GP. The executive officers of the Partnership GP have the right to indemnification pursuant to the terms of the Partnership Agreement and the limited liability company agreement of the Partnership GP.

Officers of Partnership GP

Each of the executive officers of Partnership GP are expected to continue to serve as executive officers of the Partnership GP following the Transactions.

No Golden Parachute or Other Compensation Payable to the Named Executive Officers of the Partnership by the Buyer Parties or the Partnership in Connection with the Transactions

None of the executive officers of the Partnership GP are entitled to any compensation from the Buyer Parties or the Partnership as a result of any agreement or understanding between such executive officer and the Partnership or the Buyer Parties that is enhanced by reason of the occurrence of the Transactions.

Section 14A(b) of the Exchange Act and Item 402(t) of Regulation S-K under the Exchange Act require that companies provide their shareholders with the opportunity to vote to approve, on an advisory non-binding basis, any “golden parachute compensation” for its named executive officers regarding any agreement or understanding, between such named executive officer and the acquiring company or target company that is based on or otherwise relates to the Transactions. Because no “golden parachute” or similar compensation arrangements are to be received by any of the named executive officers of the Partnership as a result of any agreement or understanding between such executive officer and the Partnership or the Buyer Parties based on or otherwise relating to the Transactions, no disclosure is required under Item 402(t) of Regulation S-K and no advisory vote is required by Section 14A(b) and Rule 14(a)-21(c) under the Exchange Act.

 

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Pursuant to their employment agreements with Landmark Dividend, each of the executive officers of Partnership GP are entitled to a cash transaction bonus payable within 30 days following the closing of the Transactions.

Certain Material United States Federal Income Tax Consequences

In general, the Second REIT Merger will be treated as a taxable event by the Partnership. The First Partnership Merger combined with the Second Partnership Merger will be part of a plan of liquidation of the Partnership where holders of Common Units will receive distributions of cash in liquidation of their Common Units. The Second REIT Merger and/or the distribution of cash to holders of Common Units in the First Partnership Merger may subject holders of Common Units to United States federal income tax depending on such holder’s own tax situation. Accordingly, you are strongly urged to consult your own tax advisor for a full understanding of the particular tax consequences of the Transactions to you.

Please read “Certain Material United States Federal Income Tax Consequences” for a more complete discussion of certain material United States federal income tax consequences to holders of Common Units of the Second REIT Merger and the receipt of cash by such holders in the First Partnership Merger.

Regulatory Approvals and Clearances Required for the Transaction

The following is a summary of the material regulatory requirements for completion of the transactions contemplated by the Transaction Agreement. There can be no guarantee if and when any of the consents or approvals required for the transactions contemplated by the Transaction Agreement will be obtained or as to the conditions that such consents and approvals may contain.

Under the HSR Act and related rules, certain transactions, including the Transactions, may not be completed until notifications have been given and information furnished to the Antitrust Division and the FTC and all statutory waiting period requirements have been satisfied. The initial waiting period is 30 days following the submission of the HSR filings. This period may be shortened if the reviewing agency grants “early termination” of the waiting period, or it may be lengthened if the ultimate parent entity, as defined under the HSR Act, of LM Infra voluntarily withdraws and refiles to allow a second 30-day waiting period, or the reviewing agency issues a formal request for additional information and documentary material (known as a “Second Request”).

At any time before or after the Closing Date, the Antitrust Division or the FTC could take action under the antitrust laws, including seeking to prevent the Transactions, to rescind the Transactions or to conditionally approve the Transactions upon the divestiture of assets of the parties or subject to other remedies. In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest including without limitation seeking to enjoin the completion of the Transactions or permitting completion subject to regulatory concessions or conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. There can be no assurance that a challenge to the Transactions on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

The parties determined that a Premerger Notification and Report Forms with the Antitrust Division and the FTC in connection with the Transactions was not required.

Pursuant to the Foreign Acquisitions and Takeovers Act 1975 of Australia, certain acquisitions by foreign persons of Australian companies, businesses and real property assets, including the Transactions, must be notified to the Foreign Investment Review Board (“FIRB”) for approval by the Australian Treasurer. Landmark Dividend, LM DV Infra and their affiliates submitted a FIRB application on September 10, 2021.

 

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Each party to the Transaction Agreement agreed to, and to cause their respective affiliates to, (including to cause their respective subsidiaries to) use reasonable best efforts to obtain promptly (and in any event no later than the Outside Date) all approvals, consents, clearances, expirations or terminations of waiting periods, registrations, permits, authorizations and other confirmations from any governmental authority or third party necessary, proper or advisable to consummate the transactions contemplated by the Transaction Agreement, including making the required filings under the HSR Act, if required, and FIRB within 10 business days after the date of the Transaction Agreement. Notwithstanding the foregoing, none of the Buyer Parties, Landmark Dividend or any of their respective affiliates are under any obligation to dispose, transfer or separate any assets or operations in order to obtain any approval or consent.

Financing of the Transactions

The Buyer Parties anticipate that the total amount of funds necessary to consummate the Transactions and the related transactions will be approximately $1.1 billion. The Buyer Parties have represented to the Partnership Parties that the aggregate proceeds contemplated by the Debt Commitment Letter (subject to any replacement thereof with other debt financing as permitted by the Transaction Agreement) and the Equity Commitment Letter will be sufficient to consummate the Transactions and the related transactions, including payment of the Required Amount. The Buyer Parties’ obligations to close the Transactions is not conditioned on its ability to obtain financing.

Debt Commitment Letters

Concurrently with the execution of the Transaction Agreement, LM DV Infra entered into the Debt Commitment Letter Commitment Letter with the Financing Banks, pursuant to which the Financing Banks committed, subject to the terms and conditions set forth therein, to provide revolving loans to LM DV Infra pursuant to a senior secured revolving credit facility in an aggregate principal amount of up to $500 million (to fund, among other uses, a portion of the Transactions Consideration and to pay related costs and expenses).

Senior Secured Revolving Credit Facility.

The senior secured revolving credit facility is contemplated to terminate, with all amounts outstanding thereunder due and payable in full, five years after the Closing Date. Interest on the drawn revolving loans is contemplated by the Debt Commitment Letter to accrue at adjusted LIBOR plus 225 or 250 basis points, (based upon the calculation of the total net leverage ratio). The senior secured revolving credit facility would contain customary mandatory prepayments, representations and warranties and covenants for a facility of that type. The senior secured revolving credit facility will also include financial covenants requiring compliance with (a) a minimum interest coverage ratio of 2.00 to 1.00 and (b) a maximum total net leverage ratio of 8.50 to 1.00 (which can, at the election of LM DV Infra, be increased to 9:50 to 1:00 for two specified periods in connection with permitted asset acquisitions), in each case of clauses (a) and (b), tested at the end of each fiscal quarter. The senior secured revolving credit facility will be secured by substantially all of the real and personal property of LM DV Infra and its subsidiaries (including certain subsidiary borrowers), subject to certain customary exceptions.

Although the debt financing described in this proxy statement is not subject to due diligence or a “market out” provision, which would have allowed lenders not to fund their commitments if certain conditions in the financial markets prevail, there is still a risk that such debt financing may not be funded when required. In the event that any portion of the debt financing described herein becomes unavailable, or the Buyer Parties become aware of any event or circumstance that makes any portion of the debt financing unavailable, the Buyer Parties are obligated to use their reasonable best efforts to obtain, as promptly as practicable after such occurrence, alternative financing in an amount at least equal to the commitment under the Debt Commitment Letter or such unavailable portion thereunder, which among other things, shall not be subject to any conditions precedent that would constitute “Prohibited Conditions” under the Transaction Agreement and shall otherwise be on terms not

 

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materially less favorable to the Buyer Parties than the terms and conditions set forth in the Commitment Letters and not materially less favorable to the parties to the Equity Commitment Letter. As of the date hereof, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing described herein is not available as anticipated. Except as described herein, there is no plan or arrangement regarding the refinancing or repayment of the debt financing.

The availability of the senior secured revolving credit facility is subject to certain customary closing conditions, including, but not limited to:

 

•

the execution and delivery by the borrower and guarantors of definitive documentation with respect to the senior secured revolving credit facility consistent with the Debt Commitment Letter, together with customary closing deliverables;

 

•

the accuracy of certain representations and warranties in the Transaction Agreement that are material to the interests of the lenders under the senior secured revolving credit facility and the accuracy of certain specified representations and warranties in the definitive credit documentation;

 

•

since the date of the Transaction Agreement, there shall not have occurred a “Partnership Material Adverse Effect” (as defined in “The Transaction Agreement—Representations and Warranties”);

 

•

the consummation of the Transactions in all material respects on terms described in the Transaction Agreement, after giving effect to any amendment, waiver, consent or other modification thereof other than any amendment, waiver, consent or other modification that is materially adverse to interest of the lenders under the senior secured revolving credit facility (in their capacity as such) unless consented to by the Financing Banks, such consent not to be unreasonably withheld, delayed or conditioned;

 

•

the delivery of customary information with respect to “know-your-customer” and anti-money laundering rules and regulations;

 

•

the consummation of the equity contribution contemplated by the Equity Commitment Letter;

 

•

the substantially concurrent consummation of the refinancings of certain outstanding indebtedness at the Partnership Parties;

 

•

delivery of certain audited and unaudited financial statements;

 

•

to the extent required by the definitive documentation, delivery of all documents and instruments required to create and perfect the administrative agent’s security interests in the collateral;

 

•

the expiration of a 45 calendar day period following execution of the Debt Commitment Letter; and

 

•

payment of all applicable fees and expenses.

The Debt Commitment Letter will terminate on the earliest to occur of (a) the date that is five business days after the Outside Date and (b) the valid termination of the Transaction Agreement prior to the consummation of the Transaction.

Equity Commitment Letter

Concurrently with the execution of the Transaction Agreement, the Buyer Parties entered into the Equity Commitment Letter with the Equity Investor, pursuant to which the Equity Investor has agreed to directly or indirectly, contribute proceeds to LM DV Infra for an aggregate amount of $510 million, solely for the purposes of financing the transactions contemplated by the Transaction Agreement, including the payment of a portion of the Transactions Consideration. The obligation of the Equity Investor to fund or cause the funding of its equity commitment is subject to the satisfaction or waiver of various conditions, including (a) the satisfaction or waiver of the conditions to Buyer Parties’ obligations to effect closing under the Transaction Agreement, (b) the substantially simultaneous receipt by the Buyer Parties of the proceeds of the debt financing (or confirmation that the debt financing will be promptly funded if the equity commitment is funded) and (c) the substantially simultaneous consummation of the Closing.

 

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Estimated Fees and Expenses

Under the terms of the Transaction Agreement, except for any termination fees described in “The Transaction Agreement—Termination Fees” and certain expenses related to the debt financing, all fees and expenses incurred in connection with the Transactions, including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by a party in connection with the negotiation and effectuation of the terms and conditions of the Transaction Agreement and the Transactions, including expenses incurred in connection with the preparation, printing, filing and mailing of this proxy statement and the Schedule 13E-3 and any amendments or supplements thereto, will be borne by the respective party incurring such fees and expenses.

For more information about Evercore’s compensation, see “—Opinion of Evercore—Financial Advisor to the Conflicts Committee.”

The Partnership has retained Okapi Partners as a proxy solicitation and information agent and Computershare, Inc., as the paying agent in connection with the Transactions. Okapi Partners may contact Unitholders by mail, telephone, facsimile, email and personal interview and may request banks, brokers, dealers and other nominee unitholders to forward materials relating to the Transactions to beneficial owners.

As compensation for acting as a proxy solicitation and information agent in connection with the Transactions, Okapi Partners will receive fees not to exceed $360,000, plus additional payments for calls with non-institutional investors and the reimbursement of out-of-pocket costs and related expenses. The Partnership will pay the paying agent approximately $50,000, and will indemnify the paying agent against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Partnership for customary handling and mailing expenses incurred by them in forwarding materials to their customers.

The following is an estimate of fees and expenses to be incurred by the Partnership in connection with the Transactions:

 

Description		Amount
Legal		$	4,080,000
Financial Advisors		$	2,800,000
Printing and Mailing		$	85,000
SEC Filing Fees		$	57,566
Paying Agent		$	50,000
Proxy Solicitation and Information Agent		$	450,000
Miscellaneous		$	25,000
Total		$	7,547,566

Certain Legal Matters

General

In the Transaction Agreement, the parties have agreed to cooperate with each other to make all filings with governmental authorities and to obtain all governmental approvals and consents necessary to consummate the Transactions, subject to certain exceptions and limitations. It is a condition to the consummation of the Transactions that required governmental consents and approvals have been obtained before the effective date of the Transactions.

Certain Litigation

Between September 13 and October 1, 2021, five purported Unitholders filed lawsuits under the federal securities laws in the United States District Court for the Southern District of New York, the United States

 

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District Court for the District of New Jersey and the United States District Court for the Central District of California challenging the accuracy of the disclosures made in this proxy statement in connection with the Transactions. The cases filed in the United States District Court for the Southern District of New York are captioned O’Dell v. Landmark Infrastructure LP et al., Case No. 1:21-cv-07635 (S.D.N.Y.) (the “O’Dell Action”), Whitfield v. Landmark Infrastructure Partners LP et al., Case No. 1:21-cv-07731 (S.D.N.Y.) (the “Whitfield Action”) and Robinson v. Landmark Infrastructure Partners LP, et al., Case No. 1:21-cv-07988 (S.D.N.Y.) (the “Robinson Action”). The case filed in the United States District Court for the District of New Jersey is captioned Delancy v. Landmark Infrastructure Partners LP et al., Case No. 2:21-cv-17971 (D. N.J.) (the “Delancy Action”). The case filed in the United States District Court for the Central District of California is captioned Unger v. Landmark Infrastructure Partners LP, et al., Case No. 2:21-cv-07849 (C.D. Cal.) (the “Unger Action” and, collectively with the O’Dell Action, the Whitfield Action, the Robinson Action and the Delancy Action, the “Actions”). The Actions are brought only on behalf of each named plaintiff.

Each of the Actions allege violations of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder based on various alleged omissions of material information from the Partnership’s September 10, 2021 preliminary proxy statement (the “Proxy”) filed in connection with the Transactions. The O’Dell Action, the Whitfield Action, the Robinson Action, and the Delancy Action name as defendants the Partnership and each of the Partnership GP’s directors, individually. The Unger Action names as a defendant the Partnership, four of the Partnership GP’s directors, individually (Arthur P. Brazy, Keith Benson, Thomas Carey White III, and Gerald A. Tywoniuk), and three of the Partnership GP’s former directors individually (Matthew P. Carbone, James F. Brown and Edmund G. Leung). All five Actions seek damages, expert and attorneys’ fees, and to enjoin the Unitholders vote required to consummate the proposed Transactions unless and until the defendants disclose the allegedly omitted material information. The Delancy Action, the O’Dell Action, and the Whitfield Action also seek a rescission of the proposed Transactions to the extent already consummated, or an award of rescissory damages.

Each of the Partnership and the Partnership GP believes that the Actions are without merit and, along with the individual defendants, intends to defend against the Actions; however, neither the Partnership nor Partnership GP can predict the amount of time and expense that will be required to resolve the Actions or their outcomes. Additional lawsuits arising out of or related to the proposed Transactions may also be filed in the future.

Provisions for Unaffiliated Security Holders

No provision has been made to grant Partnership Unaffiliated Unitholders access to the partnership files of the Partnership, Partnership GP or the Buyer Parties or to obtain counsel or appraisal services at the expense of the foregoing parties.

Delisting and Deregistration of Common Units and Preferred Units

If the First Partnership Merger is completed, the Common Units and Preferred Units will cease to be listed on the NASDAQ Global Market and will be deregistered under the Exchange Act.

No Dissenters’ or Appraisal Rights for Unitholders or Holders of Preferred Units

Under the Delaware Revised Uniform Limited Partnership Act and the Partnership Agreement, there are no dissenters’ or appraisal rights for the Unitholders or holders of Preferred Units with respect to the Transactions.

Accounting Treatment

The Transactions will be accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification. As the Partnership and the Buyer Parties are under common control, the Transactions will be accounted for as equity transactions and no gain or loss on the Transactions will be recognized in the Partnership’s consolidated statements of operations.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement and the documents incorporated herein by reference contain forward-looking statements concerning the Partnership’s operations, economic performance or financial condition. Forward-looking statements give the Partnership’s current expectations, contain projections of results of operations or of financial condition or forecasts of future events. Words such as “could,” “will,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this proxy statement include the Partnership’s expectations of plans, strategies, objectives, growth and anticipated financial and operational performance. Forward-looking statements can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed.

All statements other than statements of historical fact included or incorporated by reference in this proxy statement, including statements regarding the Partnership’s financial position, business strategy and other plans and objectives for future operations or transactions, and including statements regarding the approval of the Transaction Agreement and the Transactions, the satisfaction of the closing conditions to the Transactions, the timing of the completion of the Transactions, certain expected material United States federal income tax consequences, expectations and intentions regarding outstanding litigation, expectations with respect to the synergies, costs and other anticipated effects of the Transactions and expectations regarding the Partnership’s business and the Common Units if the Transactions do not occur, are forward-looking statements.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Partnership believes that it has chosen these assumptions or bases in good faith and that they are reasonable. However, when considering these forward-looking statements, you should keep in mind the risk factors contained in the documents incorporated by reference herein and cautionary statements in this proxy statement. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause actual results to differ materially from the results contemplated by such forward-looking statements include:

 

•

the possibility that the Transactions are not consummated in a timely manner or at all;

 

•

the diversion of management in connection with the Transactions and the Partnership’s and the Buyer Parties’ ability to realize fully or at all the anticipated benefits of the Transactions;

 

•

the Partnership’s ability to complete and integrate acquisitions;

 

•

the Partnership’s ability to successfully implement its business plan;

 

•

changes in general economic conditions;

 

•

competitive conditions in the Partnership’s industry;

 

•

the effects of existing and future laws and governmental regulations;

 

•

the Partnership’s ability to complete internal growth projects on time and on budget;

 

•

the price and availability of debt and equity financing;

 

•

the number of real property interests that the Partnership is able to acquire, and whether we are able to complete such acquisitions on favorable terms, which could be adversely affected by, among other things, general economic conditions, operating difficulties, and competition;

 

•

the number of completed infrastructure developments;

 

•

the return on acquisitions and infrastructure developments;

 

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•

the prices the Partnership pays for our acquisitions of real property;

 

•

the rent increases the Partnership is able to negotiate with its tenants, and the possibility of further consolidation among a relatively small number of significant tenants in the wireless communication and outdoor advertising industries;

 

•

changes in the price and availability of real property interests;

 

•

changes in prevailing economic conditions;

 

•

unanticipated cancellations of tenant leases;

 

•

a decrease in the Partnership’s tenants’ demand for real property interest due to, among other things, technological advances or industry consolidation;

 

•

inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change, unanticipated ground, grade or water conditions, and other environmental hazards;

 

•

inability to acquire or maintain necessary permits;

 

•

changes in laws and regulations (or the interpretation thereof), including zoning regulations;

 

•

difficulty collecting receivables and the potential for tenant bankruptcy;

 

•

additional expenses associated with being a publicly traded partnership;

 

•

the Partnership’s ability to borrow funds and access capital markets, and the effects of the fluctuating interest rate on our existing and future borrowings;

 

•

restrictions in the Partnership’s revolving credit facility on its ability to issue additional debt or equity or pay distributions;

 

•

mergers or consolidations among wireless carriers;

 

•

performance of the Partnership’s joint ventures;

 

•

fluctuations in foreign currency exchange rates;

 

•

epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period;

 

•

changes in tax laws, regulations and status;

 

•

the effects of future litigation; and

 

•

certain factors discussed elsewhere in this proxy statement.

The Partnership cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risks is contained in the Partnership’s most recently filed Annual Reports on Form 10-K, previous Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings. In addition, the Partnership may be subject to currently unforeseen risks that may have a materially adverse effect on it. All subsequent written and oral forward-looking statements concerning the Partnership, the proposed Transactions or other matters and attributable to the Partnership or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. The forward-looking statements speak only as of the date made and, other than as required by law, the Partnership does not undertake any obligation to update publicly or revise any of these forward-looking statements.

 

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INFORMATION ABOUT THE PARTNERSHIP UNITHOLDER MEETING AND VOTING

Date, Time and Place

The Partnership Unitholder Meeting will be held on December 9, 2021 at 10:00 AM, Pacific Time, at 400 Continental Blvd., Suite 500, El Segundo, CA 90245. The meeting may be adjourned or postponed by the Partnership GP to another date or place for proper purposes, including for the purpose of soliciting additional proxies.

Purpose

The Unitholders will be asked to consider and vote upon the Transactions Proposal.

The Partnership will transact no other business at the Partnership Unitholder Meeting except such business as may properly be brought before Partnership Unitholder Meeting or any adjournments or postponements thereof. At this time, the Partnership knows of no other matters that will be presented for the consideration of the Unitholders at the Partnership Unitholder Meeting.

Record Date and Quorum Requirement

The Board has fixed the close of business on October 25, 2021 as the record date for the Partnership Unitholder Meeting. Unitholders that own Common Units at the close of business on the record date may vote at the Partnership Unitholder Meeting. You may cast one vote for Common Unit that you own as of the close of business on the record date. Votes may be cast at the Partnership Unitholder Meeting in person or by proxy.

The presence, in person or by proxy, at the Partnership Unitholder Meeting of holders of a majority of the Common Units, as of the record date, will constitute a quorum and will permit the Partnership to conduct the proposed business at the Partnership Unitholder Meeting. Common Units will be counted as present at the Partnership Unitholder Meeting if the Unitholder is present in person at the Partnership Unitholder Meeting or has submitted and not revoked a properly executed proxy card or properly submitted and not revoked a proxy via telephone or the Internet. Proxies received but marked as abstentions will be counted as Common Units that are present and entitled to vote for purposes of determining the presence of a quorum. A broker non-vote will also be considered present at the Partnership Unitholder Meeting for purposes of determining the presence of a quorum but cannot be included in the vote. Abstentions and broker non-votes have the same effect as a vote against the Transactions for purposes of the vote required under the Transactions Agreement and the Partnership Agreement.

Submitting a Proxy Card

Unitholders holding Common Units in their own name may submit their proxy by completing, signing, dating and mailing the enclosed proxy card in the enclosed postage-prepaid envelope. Submitting a proxy by this method will not affect your right to attend the Partnership Unitholder Meeting.

Unitholders holding Common Units in “street name” by a bank, broker or other nominee should follow the separate voting procedures, if any, provided by the bank, broker or other nominee with this proxy statement.

Submitting a Proxy via Telephone or Internet

Unitholders holding Common Units in their own name who choose to submit their proxy via telephone or the Internet should follow the instructions set forth on the enclosed proxy card. The telephone and Internet proxy procedures are designed to authenticate proxies by use of a personal control number, which appears on the proxy card. These procedures, which comply with Delaware law, allow you to appoint a proxy to vote your Common Units, and to confirm that your instructions have been properly recorded. If you submit your proxy via telephone or the Internet, you do not have to mail in your proxy card, but your proxy must be received by 11:59 p.m., Pacific Standard Time, on December 8, 2021, which may be extended in the sole discretion of the Partnership GP.

 

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Unitholders holding Common Units in “street name” by a bank, broker or other nominee should follow the instructions provided with the proxy materials to determine if Internet or telephone proxy submission is available. If your bank, broker or other nominee does make Internet or telephone proxy submission available, please follow the instructions provided on the voting form supplied by your bank, broker or other nominee.

Revoking Your Proxy

If your Common Units are registered directly in your name with the transfer agent, you may revoke your proxy with regard to such shares at any time before it is voted at the Partnership Unitholder Meeting by:

 

•

submitting a proxy again prior to the Partnership Unitholder Meeting through any of the methods available to you;

 

•

giving written notice of revocation to the general counsel of the Partnership GP, which must be received by the general counsel of the Partnership GP by the time Partnership Unitholder Meeting begins; or

 

•

attending the Partnership Unitholder Meeting and voting your Common Units in person.

If your Common Units are held through a bank, broker or other nominee, you should follow the instructions of your bank, broker or other nominee regarding the revocation of proxies. If your bank, broker or other nominee allows you to submit your proxy via telephone or Internet, you may be able to change your proxy by submitting a proxy again by telephone or Internet.

Questions and Additional Information

If you have any questions about the Transactions Proposal, need additional copies of this proxy statement or the enclosed proxy card or require assistance in voting Common Units, you should contact the Partnership’s proxy solicitor, Okapi Partners, at 212-297-0720.

Voting at the Partnership Unitholder Meeting

Submitting a proxy now will not limit your right to vote at the Partnership Unitholder Meeting if you decide to attend in person. If you plan to attend the Partnership Unitholder Meeting and wish to vote in person, you will be given a ballot at the Partnership Unitholder Meeting. Please note, however, that if your Common Units are held in “street name” by a bank, broker or other nominee, and you wish to vote at the Partnership Unitholder Meeting, you must bring to the Partnership Unitholder Meeting a proxy from the bank, broker or other nominee authorizing you to vote at the Partnership Unitholder Meeting. Please contact your bank, broker or other nominee for specific instructions.

Vote Required; How Common Units are Voted

Pursuant to the Transaction Agreement and the Partnership Agreement, holders of at least a majority of the issued and outstanding Common Units must affirmatively vote or consent in favor of the Transactions Proposal in order for it to be approved. Failures to vote, in addition to abstentions and broker non-votes, will have the same effect as a vote against the Transactions Proposal for purposes of the vote required under the Transaction Agreement and the Partnership Agreement.

If you have timely and properly submitted your proxy, clearly indicated your vote and have not revoked your proxy, your Common Units will be voted as indicated on your proxy. If you have timely and properly submitted your proxy but have not clearly indicated your vote, your Common Units will be voted “FOR” approval of the Transactions Proposal.

If any person or group other than the Partnership GP and its Affiliates acquires beneficial ownership of 20% or more of any class of units of the Partnership, that person or group loses voting rights on all of its shares. This

 

58

loss of voting rights does not apply to any person or group that acquires the shares from the Partnership GP or its Affiliates and any transferees of that person or group who are notified by the Partnership GP that they will not lose their voting rights, to any person or group who acquires the shares with the prior approval of the Board or to transferees of such person or group, provided such transferee is an Affiliate of the transferor.

If any other matters are properly presented for consideration at the Partnership Unitholder Meeting or any adjournment or postponement thereof, the persons named in the proxy will have the discretion to vote on these matters.

Common Units Beneficially Owned by the Partnership GP Directors and Executive Officers

The Partnership GP’s directors and executive officers beneficially own, collectively, 250,418 Common Units as of September 7, 2021. These Common Units represent, collectively, approximately 0.98% of the total voting power of The Partnership’s outstanding voting securities as of such date. The Partnership currently expects that all of its directors and executive officers will vote their Common Units in favor of the Transactions Proposal to be voted on at the Partnership Unitholder Meeting.

Proxy Solicitation

This proxy statement is being furnished in connection with the solicitation of proxies by the Partnership GP on behalf of the Conflicts Committee. The expenses of such solicitation, including the expenses of preparing, printing and mailing the proxy statement and materials used in the solicitation, will be borne by the party incurring such expenses. In addition to the mailing of this proxy statement, proxies also may be solicited by the Partnership GP’s and its Affiliates’ directors, officers and employees by telephone, electronic mail, letter, facsimile or in person, but no additional compensation will be paid to them. The Partnership may also reimburse brokers, custodians, nominees, fiduciaries and others for expenses incurred in forwarding proxy materials to the beneficial owners of Common Units.

 

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THE TRANSACTIONS PROPOSAL

The Proposal

At the Partnership Unitholder Meeting, Unitholders are being asked to consider and approve the Transaction Agreement and the Transactions. A copy of the Transaction Agreement is attached as Annex A to this proxy statement.

Board Recommendation

The Board, after considering various factors, including the unanimous determination and recommendation of the Conflicts Committee, has determined that the Transaction Agreement and the transactions contemplated thereby, including the Transactions, are in the best interests of the Partnership and the Partnership Unaffiliated Unitholders and has approved the Transaction Agreement and the transactions contemplated thereby, including the Transactions.

Accordingly, the Board recommends that the Unitholders vote “FOR” the Transactions Proposal.

Vote Required

Pursuant to the Transaction Agreement and the Partnership Agreement, holders of at least a majority of the issued and outstanding Common Units must affirmatively vote or consent in favor of the Transactions Proposal in order for it to be approved. Failures to vote, in addition to abstentions and broker non-votes, will have the same effect as a vote against the Transactions Proposal for purposes of the vote required under the Transaction Agreement and the Partnership Agreement.

 

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POSTPONEMENT OR ADJOURNMENT

Pursuant to the Partnership Agreement, prior to the date of the Partnership Unitholder Meeting, the Partnership GP, as the general partner of the Partnership, may postpone the Partnership Unitholder Meeting one or more times for any reason by giving no fewer than two days’ notice to each Unitholder entitled to vote at the meeting and a new record date does not need to be fixed if the postponement is not for more than 45 days. No vote of the Unitholders is required for any adjournment or postponement. If the requisite unitholder vote to approve the Transactions Proposal has not been received at the time of the Partnership Unitholder Meeting (or such adjourned meeting), the Partnership may choose to solicit additional proxies in favor of the Transactions Proposal.

 

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OTHER MATTERS

Other Matters for Action at the Partnership Unitholder Meeting

As of the date of this proxy statement, the Board knows of no other matters that will be presented for consideration at the Partnership Unitholder Meeting other than as described in this proxy statement.

Householding of Partnership Unitholder Meeting

The SEC has adopted rules that permit companies and intermediaries (such as brokers or banks) to satisfy the delivery requirements for proxy statements with respect to two or more security holders sharing the same address by delivering a single notice or proxy statement addressed to those security holders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for security holders and cost savings for companies. Banks, brokers and other nominees may be participating in the practice of “householding” proxy statements and annual reports. As indicated in the notice provided by these banks, brokers and other nominees to Unitholders, a single proxy statement will be delivered to multiple Unitholders sharing an address unless contrary instructions have been received from an affected Unitholder. Once you have received notice from your bank, broker or other nominee that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you would prefer to receive separate copies of the proxy statement either now or in the future, please contact your bank, broker or other nominee or contact Okapi Partners, the Partnership’s proxy solicitor, or contact the Partnership by written or oral request to the Partnership at 400 Continental Blvd., Suite 500, El Segundo, CA 90245 or by telephone at (213) 788-4528.

 

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THE TRANSACTION AGREEMENT

The following is a summary of the material terms of the Transaction Agreement. The provisions of the Transaction Agreement are extensive and not easily summarized. The following summary is qualified in its entirety by reference to the Transaction Agreement, a copy of which is attached to this proxy statement as Annex A and is incorporated into this proxy statement by reference. You should read carefully the Transaction Agreement in its entirety because it, and not this proxy statement, is the legal document that governs the terms of the Transactions.

The Transaction Agreement contains representations and warranties by each of the parties to the Transaction Agreement (each referred to individually as a “party” and collectively as the “parties”). The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Transaction Agreement. The disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached Transaction Agreement. Accordingly, you should keep in mind that the representations and warranties are modified in part by the underlying disclosure schedules. The disclosure schedules contain information that has been included in the Partnership’s prior public disclosures, as well as additional information, some of which may be non-public. Information concerning the subject matter of the representations and warranties may have also changed since the date of the Transaction Agreement, and all of this information may or may not be fully reflected in the Partnership’s public disclosures. Accordingly, the representations, warranties and covenants in the Transaction Agreement and the description of them in this proxy statement should not be read alone but instead should be read in conjunction with the other information contained in the reports, statements and filings of the Partnership filed with the SEC.

The Transactions

Pursuant to the Transaction Agreement and subject to the satisfaction or waiver of certain conditions therein, LM Infra will acquire all of the assets of the Partnership through the following series of transactions: (a) LM DV Infra and its subsidiaries will acquire subsidiaries of REIT Subsidiary and REIT LLC, (b) REIT LLC will then merge with and into REIT Subsidiary, with REIT Subsidiary surviving the merger, (c) REIT Subsidiary will then merge with and into the Partnership, with the Partnership surviving the merger, (d) Merger Sub II will then merge with and into the Partnership, with the Partnership surviving the First Partnership Merger and (e) the Partnership will then merge with and into Merger Sub, with Merger Sub surviving the Second Partnership Merger. As a result of the Transactions, the Common Units will be delisted from the NASDAQ Global Market.

Under the terms of the Transaction Agreement, at the First Partnership Merger Effective Time, (a) each issued and outstanding Common Unit, other than the Landmark Dividend Common Units, will be converted into the right to receive $16.50 per Common Unit in cash without any interest thereon, (b) each issued and outstanding Series A Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series A Preferred Unit in cash without any interest thereon, (c) each issued and outstanding Series B Preferred Unit will be converted into the right to receive $25.00 plus the amount of any accumulated and unpaid distributions per Series B Preferred Unit in cash without any interest thereon and (d) each issued and outstanding Series C Preferred Unit will be converted into the right to receive the greater of (1) $25.00 plus the amount of any accumulated and unpaid distributions per Series C Preferred Unit to, but not including, the date of the First Partnership Merger Effective Time plus the amount of any distributions that would have accrued from the date of the First Partnership Merger Effective Time to, but not including, the 50th Business Day following the First Partnership Merger Effective Time and (2) the sum of (i) the product of (x) the Alternative Conversion Amount multiplied by (y) Partnership Unaffiliated Unitholders Consideration plus (ii) the amount of any accumulated and unpaid distributions for all prior Series C Distribution Periods ending on or prior to the 20th Business Day following the First Partnership Merger Effective Time, per Series C Preferred Unit in cash without any interest thereon.

 

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