Canada’s Fiera Infrastructure is in talks about its first European transport acquisition, the purchase of a 50% stake in Isle of Wight ferry operator Wightlink from Basalt Infrastructure Partners.
Basalt last summer appointed Macquarie Capital to conduct a strategic review of Wightlink examining options including a sale of the business. It completed a refinancing of the asset earlier this year, as reported.
A source close to the process said that Fiera is in exclusive talks about the acquisition of the stake, while another person following the process said that Fiera was in discussions about Wightlink but was not aware of how these had progressed.
Basalt was prompted to put Wightlink on the market by the high valuation achieved by rival Isle of Wight ferry company Red Funnel, which was sold by Infracapital in 2017 to a group of pension funds for GBP 370m, around 18 times EBITDA.
Basalt bought Wightlink, which operates ferries connecting Portsmouth and Lymington on the south coast of England with the Isle of Wight, from Macquarie in 2015, for around GBP 230m, or around 12 times EBITDA.
The latest sale process for Wightlink attracted interest from infrastructure investors including Arcus, Dalmore and DIF, as reported, but failed to result in a deal in its early stages.
Fiera Infrastructure was set up as a joint venture between Toronto-listed asset manager Fiera Capital and Canadian infrastructure manager Aquila Infrastructure in 2016. Most of its investments are in North America, but its European portfolio includes a stake in UK water company Thames Water, the London-based energy from waste company Cory Riverside and the Spanish subsea telecom cable company Islalink.
Fiera infrastructure is focused on mid-market core and “core-plus” infrastructure across different sectors with a focus on regulated entities, assets under long-term contract and PPPs.
Wightlink is one of a number of European ferry companies to have come to market lately. Earlier this year Norwegian transportation company Det Stavangerske Dampskibselskab issued teasers for the sale of Norled, which operates ferry routes in the Norwegian fjords, while Macquarie has appointed Rothschild to examine a sale of Channel Island ferry operator Condor Ferries later this year.
Basalt itself earlier this year completed its acquisition of a 30% all-equity stake in ferry business Caronte & Tourist, the largest operator of roll-on-roll-off ferries between Sicily and the Italian mainland.
Aside from the Red Funnel sale, recent deal multiples in the sector include First State and Hermes last year agreeing to buy a majority stake in Denmark-to-Germany ferry operator Scandlines for an enterprise value of EUR 2.56bn, around 14 times EBITDA.