3i Infrastructure plc announces investment in airport support equipment firm TCR

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3i Infrastructure plc announces investment in airport support equipment firm TCR

3i Infrastructure has signed an agreement to invest approximately €200 million (US$229.8 million), subject to completion adjustments, in TCR, in a consortium with Deutsche Asset Management (Deutsche AM).

Headquartered in Brussels, Belgium, TCR is Europe’s largest independent asset owner of airport ground support equipment (GSE) and operates at approximately 100 airports.

3i Infrastructure and Deutsche AM’s infrastructure investment business will each acquire economic interests in TCR of up to 50% with the remaining equity being retained by the existing management team. 3i Infrastructure and Deutsche AM are purchasing their interests from the current owners, Chequers Capital and Florac.

Since inception, TCR has defined the market for leased GSE, providing a full service leasing, maintenance and fleet management offering to its clients, which are predominantly independent ground handling companies, airlines and airports. This enables GSE operators to concentrate on their core business of ground handling. The equipment that TCR provides to its clients is critical infrastructure, without which some of Europe’s busiest airports could not operate.

The leasing model makes up a growing proportion of the overall market for GSE in Europe where most equipment remains owned by airlines and ground handlers. GSE leasing is becoming an increasingly attractive model, as it offers greater flexibility than ownership and provides ground handlers with an external source of capital for investment.

Completion of the transaction is conditional upon receiving clearance from the European Commission under the EU Merger Regulation which is anticipated by the end of August 2016.

3i Infrastructure has exercised the accordion option in its Revolving Credit Facility, increasing liquidity by a further £200 million until December 2016.

Richard Laing, Chairman, 3i Infrastructure plc, commented:

“We are pleased to be investing in TCR, which fits our strategy of investing in companies with good asset backing, strong market positions and barriers to entry, yet with operational levers to achieve attractive returns for 3i Infrastructure’s shareholders.”

Ben Loomes and Phil White, Managing Partners and Co-heads, Infrastructure, 3i Investments plc, added:

“TCR is a clear leader in its market and well positioned to grow with the trend towards increased GSE outsourcing in Europe. We also plan to support TCR as it grows internationally where we see attractive opportunities, using 3i’s, and Deutsche AM’s, network of offices and contacts. We look forward to working with TCR’s management team to achieve this.”

Hamish Mackenzie, Managing Director, Head of Infrastructure Europe and Debt at Deutsche AM said:

“We are excited by this investment in TCR. It represents a unique opportunity to invest in one of the best performing companies in the aviation sector. The management team is strong and we look forward to working alongside them and our partners 3i in delivering the full potential on a European and global scale."

Bertrand Rabiller, Partner at Chequers Capital, stated:

“We are delighted to have supported the TCR management team in developing the group in Europe over the last ten years. We are convinced that the ownership of two reputable infrastructure funds will enable its next phase of development on a global basis.”

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