QIC and Royal Schiphol Group have agreed to acquire 70% of Hobart International Airport from Macquarie Infrastructure and Real Assets and Tasplan, according to an announcement.
Pricing and terms of the transaction were not disclosed. Three sources close to the process said the airport sold for about 30x EBITDA, while a fourth put it at 25x-26x.
The underbidder was a consortium of CBUS and Hostplus, according to two sources familiar with the situation, who claimed the sale price was above 30x.
The sale was based on forecast EBITDA of around AUD 35m (USD 23.43m) for the 2020 financial year, the sources close to the situation said.
The earnings estimates suggest the price is between AUD 600m and AUD 750m for a 70% share.
QIC and Schiphol will split the investment 50:50 once financial close is reached, which is expected by the end of October, QIC said in the statement.
MIRA said in a statement that the Global Infrastructure Fund III sold its 50.1% holding and state super fund Tasplan sold 19.9% of its 49.9% stake in the airport.
Tasplan waits until final bid
MIRA formally kicked off the sale of its 50.1% shareholding in May when adviser Credit Suisse sent out a sale flier. Tasplan retained ICA Partners (then known as Ironstone Capital) as its advisers to consider its options, but waited until final bids were lodged for MIRA’s stake before making its final decision.
Final bids from QIC and Schiphol; Vinci; UniSuper; and CBUS and Hostplus were handed in on Friday (27 September). The relatively small airport attracted a strong bidding field as there are very few large brownfield opportunities in Australia at the moment and capital city airport stakes rarely come on the market.
QIC and Schiphol also bid together at the indicative bid stage, not separately as previously reported.
The bidders did not know Tasplan’s intentions until about 24 hours before the winning bids were announced, according to one of the source close. However, QIC and Schiphol did indicate they were prepared to buy up to 70% of the asset in their final bid.
Another bidder that didn’t make it to the final round also told Inframation before they bid they would be prepared to buy up to 70%.
As well as moving to invest in facilities to allow international passenger flights, the airport is now developing infrastructure to enable direct international export of Tasmania’s fresh produce.
In addition, Hobart’s “non-aeronautical” earnings are about 54% lower than the average of the other Australian capital city airports and only 1% of the land it owns has been developed, providing significant growth opportunities.
“[Hobart International Airport] is a high-quality, core infrastructure asset and one of Australia’s fastest-growing airports, with Tasmania registering more than 10% annual growth in international visitors in the last five years,” said Ross Israel, QIC’s Head of Global Infrastructure in a statement.
“There is further visitor growth to come following the recent runway extension, with significant value to be unlocked from additional development of the airport’s non-aeronautical business, which includes retail, food and beverage, ground transport and property development.”
“Royal Schiphol Group will be an active partner in the development of the airport, bringing in our knowledge and expertise on operations, innovation and commercial aspects where required,” said Dick Benschop, CEO of the Royal Schiphol Group, in the statement.
QIC and Schiphol are already shareholders in Brisbane Airport, alongside IFM Investors, UniSuper, MTAA Super, AustralianSuper and First Sentier Investments.
Hostplus, CBus, QIC and Macquarie declined to comment on further details.