EMEA: iCON to pay over 15x for regional airport stake

07 August 2018 - 12:00 am UTC

iCON Infrastructure has agreed to buy a 30% stake in Hanover Airport for EUR 109.2m from German airport group Fraport, its first acquisition in the sector.

The price paid by iCON, which will co-own the airport with the City of Hanover (35%) and the State of Lower Saxony (35%), equates to an enterprise value (EV) of around EUR 500m for the whole airport, according to someone close to the deal.

The EV is around 19 times the EUR 26.9m EBITDA Fraport reported for the airport in 2017. 

However, the actual EBITDA figure could be up to EUR 5m higher stripping out accounting adjustments Fraport makes when reporting subsidiary results in its consolidated accounts, the person said. An EBITDA of EUR 31.9m would equate to an EV/EBITDA multiple of around 16 times.

The deal is being fully-financed with equity, it is understood.

Hanover Airport reported traffic of 5.9m passengers in 2017, up 8.5% from the previous year. It is Germany’s ninth busiest airport.

It is the only major airport in the Hanover area, the nearest ones being Hamburg Airport, which is 160km from Hanover Airport and the smaller Bremen Airport, which is 115km away. Hanover Airport also benefits from having a 24-hour flight licence. 

Although airports are a target sector for iCON, the Hanover Airport stake purchase is its first investment in the sector to date. iCON Infrastructure partner Reiner Shränkler, who is based in its Düsseldorf office, was formerly the chief executive of construction company HOCHTIEF’s airport business. 

iCON was formed in 2011 as part of a management buyout from Deutsche Bank. It has offices in London, Düsseldorf and Toronto.

The Hanover Airport stake is being bought by iCON IV, iCON’s latest fund. iCON’s current portfolio in Europe includes two container ports in the Netherlands and one in Italy as well as energy and water assets. It also has assets in North America.