EMEA: Euroports IMs issued as potential bidder line-up emerges

13 June 2018 - 12:00 am UTC

Infrastructure fund-owned Euroports has issued information memorandum for the sale of the company, as evidence emerges of fund interest in the asset.

Sources with knowledge of the process said DWS (formerly Deutsche Asset Management), First State Investments and Macquarie are considering submitting first round bids, due next month. MEAG and Swiss Life are also interested, according to one of the sources.

3i Infrastructure was previously linked to the sale but is no longer expected to take part, it is understood.

A buyside source predicted that the ports company could be valued at between EUR 700m and EUR 800m, or 10-11x its 2017 EBITDA, which is more than EUR 70m.

Macquarie and Goldman Sachs agreed to pay 13x EBITDA, or EUR 1.3bn, earlier this year for another company with a portfolio of dry bulk terminals, HES International.

HES has a higher valuation because its terminals are in more strategic locations, and it has a number of growth projects underway to move into the liquids market. The new terminals are predicted to almost double the company’s EBITDA by 2021.

Euroports operates a portfolio of concessions at 27 port terminals across Europe, including Belgium, France and Germany, and a further three port terminals in China.

The portfolio includes facilities to ship commodities – most importantly sugar, forestry products, fertilisers and minerals, agribulk, metals and steel, coal, and fresh and frozen food – in 15 locations.

The assets and the markets they serve are diverse and hard to understand, market sources said.

The port concessionaire’s most important market is Belgium, with four terminals in Antwerp Port, one in Ghent, and inland terminals Charleroi and Liege, which together comprise 30% of 2017 EBITDA.

This includes Europe’s largest sugar terminal in Antwerp, which transits 20% of EU exports of the product. The sugar business makes up more than 10% of Euroports’ EBITDA under a long-term take or pay contract.

The Finnish business, most importantly at Rauma Port, is the second largest, forming 23% of EBITDA. It is a key element of Euroports’ forest products strategy, which links ports in Europe and China. The Chinese forestry products terminals Gaolan and Changshu makeup 13% of EBITDA.

Rostock Port in Germany, which focuses on break bulk for central Europe, comprises 19% of EBITDA.

Spain, mainly through Tarragona Port, makes up 9% of EBITDA, while France, Italy, Bulgaria and Turkey are less important.

In 2017, Euroports handled 61m tons of break bulk, bulk and containerized goods, of which around 15% was coal transiting through five European ports. The coal business makes up around 5% of EBITDA.

Shareholders Brookfield (40%), Antin Infrastructure Partners (38.8%), and Arcus (21.2%) are advised by Citi, Goldman Sachs and White & Case. They declined to comment.

MEAG, DWS declined to comment. FSI, Macquarie and Swiss Life did not respond to requests for comment.