Vinci to pay circa 20x for Gatwick stake

27 December 2018 - 12:00 am UTC

France’s Vinci Airports has agreed to buy a 50.01% stake in Gatwick Airport for a GBP 2.9bn equity price, a deal that it said gives the asset an enterprise value of 19 to 20 times EBITDA. 

The agreed purchase, from Global Infrastructure Partners (GIP) and co-shareholders, comes after GIP initiated a sale process for its 42% stake earlier this year.

The other current shareholders in Gatwick are ADIA (15.9%), CalPERS (12.7%), National Pension Service of Korea (12.1%) and the Future Fund (17.2%).

Following the transaction, VINCI will manage 50.01% of the asset and GIP, which previously managed the whole asset, will manage 49.99%. Inframation previously reported that GIP had been looking to sell its 42% stake in the airport while retaining management rights.

GIP and its co-shareholders are each selling half of their stakes in Gatwick to Vinci, it is understood.

Vinci  said in a presentation to investors and analysts that Gatwick benefits from being a “congested airport in a constrained London airports system.” Although Gatwick is operating at close to capacity, it recently unveiled plans to use the emergency runway as a second runway.

The enterprise value multiple given by Vinci, which is less than some recent airport transactions but still high by historical standards, is based on 2018 expected EBITDA of GBP 411m. The multiple compares with a reported 45 times EBITDA multiple that GIP received when it sold London City Airport in 2016, though London City is seen as a much higher growth asset. 

GIP bought Gatwick in 2009 for GBP 1.51bn from BAA. The New York- and London-based manager also owns Edinburgh Airport, which industry observers believe GIP is likely to look to sell once the Gatwick transaction is completed. GIP said on Thursday that it is “committed to the UK as the owner of Edinburgh Airport.” 

GIP said it expects the Gatwick sale to complete in the first half of 2019. Vinci’s purchase of the stake in Gatwick comes after it earlier this year acquired its only other airport in the UK, Belfast International, earlier this year as part of the purchase of the Airports Worldwide international portfolio. 

Vinci Airports also has airports in France, Portugal and elsewhere in Europe and in the Americas and Asia.

Aside from the Gatwick sale, other large European airport transactions on the horizon include the French government’s expected sale of its 50.6% stake in Aéroports de Paris, valued at around EUR 10bn and the sale of a 36% stake in Brussels Airport.

GIP is expected to be among the potential suitors for ADP, which manages around 26 airports worldwide including Charles de Gaulle Airport in Paris. Vinci, which owns an 8% stake in ADP already, is also expected to be interested in increasing its stake.


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