CPPIB and Hermes Infrastructure to purchase stake in ABP for £1.6bn

31 March 2015 (Last Updated March 31st, 2015 18:30)

Canada Pension Plan Investment Board (CPPIB) and Hermes Infrastructure have signed an agreement to purchase at least 30% of Associated British Ports (ABP) for £1.6bn (C$2.9bn).

ABP Cardiff

Canada Pension Plan Investment Board (CPPIB) and Hermes Infrastructure have signed an agreement to purchase at least 30% of Associated British Ports (ABP) for £1.6bn (C$2.9bn).

CPPIB and Hermes Infrastructure, which is part of Hermes Investment Management, may acquire a further 3.33% subject to pre-emption rights.

Hermes Infrastructure head Peter Hofbauer said: "ABP operates strategic UK infrastructure assets and is an excellent fit within Hermes Infrastructure’s Core investment strategy.

"This targets infrastructure businesses that deliver long-term predictable inflation-linked cashflows, with robust cash yield. An investment in ABP is expected to deliver on all of these, along with appropriate governance and a high-quality management team."

The present purchase of stakes is from GS Infrastructure Partners and Infracapital, while Borealis Infrastructure and Government of Singapore Investment Corporation (GIC) remain as ABP shareholders.

"This targets infrastructure businesses that deliver long-term predictable inflation-linked cashflows, with robust cash yield."

CPPIB said the transaction is conditional on customary anti-trust clearances and is expected to complete this year.

ABP currently owns and operates 21 ports in England, Scotland and Wales, and its business as a landlord port owner and operator is supported by a diverse cargo base, long-term contracts with a broad mix of blue chip customers and high-quality assets.

Up to December last year, CPPIB invested around £7.6bn (C$14.3bn) in real estate, infrastructure, public equities, real estate investment funds and direct investments.

Hermes Infrastructure invests in high-quality infrastructure assets on behalf of its clients and is focused on delivering enhanced risk-adjusted returns for investors, CPPIB said.


Image: ABP owns and operates 21 ports in England, Scotland and Wales. Photo: courtesy of Canada Pension Plan Investment Board.