North America: DIF among final bidders for American Roads

24 April 2018 - 12:00 am UTC

DIF submitted a final round bid for toll road owner-operator American Roads earlier this month, said two sources briefed on the situation.

The Dutch-based fund manager is understood to be one of five groups that submitted final bids.Presentations on the assets were held last week in an auction conducted by Evercore. Basalt Infrastructure, AbertisGlobalvia and Macquarie were previously named as potential bidders.

DIF is not new to US-based toll roads. DIF Infrastructure IV teamed up with HICL and Northleaf Capital Partners on 17 March 2017 to acquire the Northwest Parkway toll road for USD 761m. The trio agreed to pay USD 166m each for the asset, as reported.

As reported, American Roads’ existing owner Syncora Holdings said on its earnings call that it expected to pick the winning bidder by the end of June. The business is being marketed as having an EBITDA of USD 20m.

Its portfolio comprises five assets:

– Emerald Mountain Expressway (Wetumpka, Alabama)

– Montgomery Expressway (Millbrook, Alabama)

– Tuscaloosa Bypass (Tuscaloosa, Alabama)

– Beach Express (Orange Beach, Alabama)

– Detroit Windsor Tunnel (Detroit, Michigan).

The assets have come under some fire recently as the mayor of Orange Beach, Alabama, approved the construction of a bridge in close proximity to the Orange Beach tollway. Additionally, future performance at the Detroit Windsor Tunnel could be threatened as the Gordie Howe International Bridge project progresses. Financial proposals for Gordie Howe’s DBFOM contract are due on 8 May after three teams had been shortlisted.

According to Inframation Deals, approximately 77% of DIF’s vintage 2015 EUR 1.15bn Fund IV had been deployed as of 30 June. The fund manager also launched fundraising for its fifth fund, DIF Infrastructure V, with a target of EUR 1.5bn. The latter fund is mostly targeting European investments but North America is part of its remit.

Syncora and Evercore declined comment on the situation. DIF did not return calls seeking comment.