KKR announced the signing of a definitive agreement under which a consortium formed by AXA Investment Managers - Real Assets, acting on behalf of its clients (AXA IM – Real Assets) and Crédit Agricole Assurances will acquire European Locomotive Leasing (ELL), a leading pan-European provider of electric locomotive leasing solutions.
ELL was established in early 2014 by founder and CEO Christoph Katzensteiner together with KKR’s first Infrastructure fund, KKR Global Infrastructure Investors. The investment rationale was to meet the significant and unfulfilled market demand for modern, versatile electric locomotives, thereby supporting the broad political agenda to shift freight transportation from road to rail – a more economic and ecological transportation method – as well as to facilitate liberalization and competition in the rail market by offering leasing solutions to market players. Since its inception, the company has thrived and significantly exceeded initial expectations. While the initial business plan foresaw the purchase of a fleet of 50 locomotives, the company has after five years of operations built a fleet of over 150 locomotives that are leased on long-term contracts to over 20 customers across Continental Europe.
During that period, KKR has provided consistent support to the ELL team including through its dedicated Capital Markets team, which has led several rounds of financing for the company, each time expanding and enhancing the initial financing package put in place at the inception of the company in 2014. The investment in ELL was made through KKR Global Infrastructure Investors, KKR’s maiden vehicle in the infrastructure space raised in 2011/2012.
Crédit Agricole CIB acted as a financial advisor to KKR Infrastructure; Vinson & Elkins and K&L Gates served as legal counsels on the transaction.