I Squared Capital has agreed to buy trailer leasing company TIP from Chinese conglomerate HNA for more than EUR 1bn and plans to expand the business into new markets in Europe and North America.
Amsterdam-headquartered TIP has operations in 17 countries including the UK, Italy, France, Spain, Belgium, the Netherlands and Canada. It has more than 66,000 trailers and 86 trailer service centres.
Financial details of the transaction were not disclosed, but the price is understood to be in excess of EUR 1bn. The transaction was entirely funded by equity, it is understood.
TIP reported EBITDA of EUR 180m for 2017, up from EUR 134m the previous year, on revenue up to EUR 517m from EUR 441m. TIP had net debt of EUR 645m at the end of 2017.
I Squared partner Adil Rahmathulla said I Squared will use TIP as a platform to expand into new markets in Europe and into the US, both organically and through acquisition. He said TIP has market leading positions in Germany, the UK, Ireland, the Nordics, Belgium and Netherlands and is the second-biggest player in Canada, Italy, France and Spain.
TIP has strong infrastructure characteristics because it has contracts of around five years with customers and is “critical infrastructure” for its clients, who include haulage companies and retailers, he said.
I Squared already has an investment in American Intermodal Management, a US-based lessor of marine chassis, which are used to transport shipping containers by truck. Although it is a similar business to TIP, there are no current plans to integrate the two business, Rahmathulla said.
Aside from its transportation investments, I Squared has investments in energy, utilities and telecoms sectors.
Linklaters (legal) advised I Squared Capital on the acquisition. EH Global Capital (financial) and CMS (legal) advised HNA.
Other recent deals for leasing businesses include 3i Infrastructure and Deutsche Asset Managementacquiring TCR, a Belgian airport equipment leasing business, for EUR 776m, around 12 times expected 2016 earnings and EQT Infrastructure in 2015 buying WASH Multifamily Laundry Systems, a North America business which operates laundry services for apartment blocks and universities.
Last month HG Capital appointed advisors for the sale of its UK commercial laundry machine lessor JLA, an asset likely to attract the interest of infrastructure funds.