Canada Pension Plan Investment Board (CPPIB) and Hermes Infrastructure have signed an agreement to invest approximately £1.6 billion (US$2.38 billion) to acquire 33% stake in Associated British Ports (ABP).
Specifically, the team will acquire a stake of at least 30%, and may acquire a further 3.33% subject to pre-emption rights.The current shareholder structure of ABP is the following:
CPPIB and Hermes Infrastructure are acquiring this interest in ABP from Goldman Sachs Infrastructure Partners and Infracapital, while Borealis Infrastructure and Singapore sovereign wealth fund GIC remaining as ABP shareholders.
The transaction is conditional on customary anti-trust clearances and is expected to close in summer 2015.
ABP is the U.K.'s leading ports group; it owns and operates 21 ports in England, Scotland, and Wales. ABP's business as a landlord port owner and operator is underpinned by a diverse cargo base, long-term contracts with a broad mix of blue chip customers and high quality assets.
ABP was taken private in 2006 for £2.8 billion by the consortium mentioned above. At that moment, ABP was de-listed from the London Stock Exchange. In 2013 ABP had revenue of £503.8 million (+6.8 % compared to 2012) and an underlying operating profit of £250 million (+8.8 % compared to 2012). Traffic figures also grew at around 4 % during 2013.Cressida Hogg, Managing Director & Global Head of Infrastructure at CPPIB, stated:
"We are excited about this unique opportunity to invest in a significant portfolio of landlord ports with a proven track record of steady operational performance. This investment is an important addition to our global infrastructure portfolio and fits well with CPPIB's long-term investment mandate. We look forward to working alongside ABP management and our partners Hermes Infrastructure, Borealis Infrastructure and GIC in continuing to grow the ABP business."
Peter Hofbauer, Head of Hermes Infrastructure commented:
"ABP operates strategic U.K. infrastructure assets and is an excellent fit within Hermes Infrastructure's Core investment strategy. This targets infrastructure businesses that deliver long-term predictable inflation-linked cash flows, with robust cash yield. An investment in ABP is expected to deliver on all of these along with appropriate governance and a high-quality management team. We look forward to supporting the business in making its important contribution to the U.K. economy alongside our partners CPPIB, Borealis Infrastructure and GIC."