DWS and Peel Group have hired Rothschild as their financial advisor to sell a combined stake of up to 25% in Peel Ports, with the former planning a continuation process for its remaining stake, sources said.
The two shareholders, which have also hired Linklaters as their legal advisor for the sale, hope to sell a total holding of between 20% and 25%, with each selling the same sized stake. DWS owns around 41.5% in Peel Ports, an undisclosed investor in a DWS infrastructure fund around 8%, and Peel Group 50.1%.
DWS, which declined to comment, is open-minded as to whether it manages or not the stake it sells. “DWS just wants to get a good, sensible price,” one source said.
Several sources expect the sale to value the whole business’ equity at around EUR 4bn. The company reported EBITDA of GBP 230.1m for the year to 31 March 2018, although its EBITDA has increased by around 10% since then, sources said.
Macquarie’s DCT Gdansk terminal, a single container terminal in Poland, sold to an IFM consortium for PLN 5-6bn (EUR 1.1-1.3bn), a 16-18 times EBITDA multiple.
Peel Ports, which handles bulk liquids and solids, vehicles, energy agribulk and containers, last year had around GBP 877m of bank loans and GBP 822m of private placement debt.
DWS reportedly paid around GBP 800m for a 49% stake in 2006, later syndicating the 8.3% to a coinvestor, the name of which has not been disclosed.
Peel Ports owns terminals at Clydeport, Dublin, Great Yarmouth, Heysham and Liverpool. It also owns the 36km-long Manchester Ship Canal, which runs from the Mersey Estuary into the heart of Manchester and handles 8 million tons of cargo annually, according to Peel’s website.
The sellers, which have hired Rothschild after carrying out a financial advisor beauty parade, are at a late stage of appointing a due diligence advisor.
Peel Group – established by businessman John Whittaker and comprising a sprawling empire of real estate and infrastructure assets – is keen to sell to “rebalance his portfolio”, which it regards is too heavily weighed by Peel Ports, a source said.
The pair plan to carry out market soundings in the summer, before launching first round just before autumn, and completing the sale by year-end.
Peel Ports, which is currently finalising financial results for the 12 months to 31 March, last year reported post-tax profit of GBP 57.5m, versus losses of GBP 101.3m in 2017. Revenues last year totaled GBP 716m, against GBP 644m the previous year.
The asset’s growth story is said by sources to be around attracting new customers and extra capacity.
The port does not have immediate sizeable greenfield opportunities, although it is currently half way through construction of the second GBP 50m phase of building Liverpool2, a deepwater container terminal capable of handling the world’s largest container vessels.
The first EUR 300m phase was part funded by EUR 150m of loans from the European Investment Bank. In March, Mediterranean Shipping Company, the world’s second-largest shipping company, announced it will start calling at Peel’s Port of Liverpool. Chinese operators including COSCO and China Merchant Marine have also recently launched routes to the Liverpool port.
At the same time as selling its 10 or 12.5% stake, DWS is also expected to ask limited partners in its Pan-European Infrastructure Fund (PEIF) that owns the Peel stake whether they want to retain their commitments – equivalent of a so-called continuation process – or sell out.
DWS has already carried out informal soundings with its LPs, most of which are keen not to sell, said one well-placed source.
It is expected to formally ask the LPs via a vote whether they want to stay in close to the completion of the sale of its 10 or 12.5% stake.