Global Infrastructure Partners and co-investors are understood to have agreed to sell a 19% stake in the sprawling ports business Terminal Investment Limited, with GIC due to take 10%.
The fund manager has also agreed to sell a 9% stake to Mediterranean Shipping Company (MSC), which will increase its holding in TIL to 60% once the deal closes, sources close to the deal said.
GIP and the co-investors, whose combined stake falls from 49% to 30%, are meanwhile understood to be considering whether to sell a further stake in the business, which owns stakes in 40 container terminals worldwide.
GIP’s stake is understood to be owned via its second fund, limited partner investors in which include Alaska Permanent Fund Corporation, CalPERS and Washington State Investment Board, according to Inframation data.
The manager is believed to be hoping to retain a holding in the business and some management rights after the sale process has completed.
GIC is understood to have paid a circa 20 times EBITDA multiple in an equity-only deal. This gives the whole business an enterprise value of around USD 16bn (EUR 14.2bn), based on the company’s circa USD 800m 2018 EBITDA.
GIP and the other investors in 2013 paid EUR 1.5bn for a 35% stake, equivalent to a nine to 10 times multiple, it is understood. The acquirers subsequently increased their stake to 49%.
Geneva-headquartered TIL’s EBITDA is believed to have grown annually during GIP’s ownership by around USD 100m.
In contrast, bulk handling ports are trading at a significantly lower multiple. Macquarie and Goldman Sachs last year paid a 13 times EBITDA multiple for European terminal operator HES International, while Monaco Resources paid an ever lower multiple for Euroports earlier this year.
The deal, the result of bilateral negotiations rather than a formal auction, signed last week and GIP’s limited partners were informed of the transaction on Tuesday, sources close to the process said. GIP and GIC declined to comment.
TIL is regarded as an attractive business as its majority shareholder, MSC, is also the world’s second largest container shipping line which stops at all of TIL’s ports. In 2016, MSC represented 66% of TIL’s capacity.
The company is also geographically diverse, with terminals in the Americas, Europe, Asia and Africa. In 2016, North America represented 27% of its revenues, South America 21% and Europe 20%.