USS invests in UK motorway service stations

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USS invests in UK motorway service stations

Universities Superannuation Scheme Ltd (USS) has reached two separate definitive agreements to acquire 100% interest in the Moto Group, the largest motorway service station operator in the UK.

The transactions have been arranged by USS Investment Management Ltd, a wholly owned subsidiary of USS, and its principal investment manager and advisor.

USS has entered into a definitive agreement to acquire 82.5% interest in the Moto Group from a consortium of institutional investors. Additionally, a separate definitive agreement has been reached with EPIC Bermuda Holdings Limited to acquire 17.5% interest in the Moto Group. Both transactions are expected to close later in October 2015.

The monetary value of the transactions has not been released, but the estimated value of the deal can be calculated by a comparison with the sale of UK peer Roadchef to European fund Antin Infrastructure. With 2014 core earnings (EBITDA) of around £91 million (US$141 million), a similar valuation puts Moto at roughly £1.1 billion (US$1.7 billion).

Moto Hospitality is a company which operates 58 motorway service stations across the United Kingdom. Moto employs roughly 6,000 people across 45 locations in the UK. Macquarie has managed Moto since Compass Group sold it in April 2006 for £1,822 million.

Moto refinanced its debt in March 2015 in infrastructure-fashion, meaning the arrangement came with portability, allowing debt to stay put under new ownership. This  is appealing to potential buyers as there is no need to find debt financing to support an acquisition.

On 12 June we reported that Citi was hired by infrastructure investor Macquarie to support them during the transaction.

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