Infrastructure funds exit UK's Eversholt Rail to Cheung Kong

CKI and Cheung Kong Holdings - which is also CKI's parent company - will each hold a 50% interest in Eversholt Rail, according to a filing.

3i Infrastructure acquired its interest in Eversholt Rail in December 2010 as part of a consortium with Morgan Stanley Infrastructure Partners and STAR Capital Partners with its co-investor PGGM. They bought the business from HSBC Asset Finance in a deal that valued Eversholt's gross assets at GBP2.1 billion, contributing a combination of equity and debt.

3i Infrastructure's total equity commitment was GPB151 million. The sale to CKI will generate estimated proceeds for the firm of approximately GPB358 million. The transaction requires regulatory approval and is expected to close in March 2015.

Eversholt Rail was created in 1994 as part of the privatization of British Rail. A consortium led by Candover bought the business for GBP518 million in 1996 and then sold it on to HSBC-owned Forward Trust for GBP726.5 million about one year later.

Angel Trains Group, one of the other rolling stock operators, is owned by Arcus Infrastructure Partners. The third, Porterbrook Leasing, was acquired in October 2014 by a consortium including German insurer Allianz, Australia's Hastings Funds Management, Canada's Alberta Investment Management Corporation and EDF Invest of France.

Eversholt has a rolling stock portfolio comprising 3,474 passenger vehicles, 1,003 freight wagons, 63 load units and two depots. 3i Infrastructure said the company owns approximately 28% of the current UK passenger train fleet, with 19 fleets - predominantly weighted towards electric trains - leased to 11 train operating companies.

"We are proud of what we have achieved with Eversholt Rail through our engaged asset management approach, in partnership with management and our co-investors. The business has performed very well during our ownership and we expect it to continue to thrive, led by its strong management team, and under the ownership of CKI," Ben Loomes and Phil White, co-heads of infrastructure at 3i Investments, said in a statement.

Asian investors are increasingly drawn to the diversification and yields offered by developed market infrastructure - notably in Europe - and particularly regulated assets where the prices are locked for years at a time. CKI is no exception and Eversholt represents the group's third acquisition in six months, following deals in Canada and Australia.

CKI's acquisitiveness regularly facilitates exits for private equity. For example, in 2013 the group led a consortium that bought Dutch waste management provider AVR Afvalverwerking from CVC Capital Partners and KKR, and New Zealand-based waste services business EnviroWaste from Ironbridge Capital.

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• Topics
• Exits
• Europe
• Infrastructure
• Infrastructure
• Infrastructure
• Europe
• United Kingdom
• Exit
• Trade sale
• Infrastructure
• 3i Asia Pacific
• Morgan Stanley
• Hong Kong (China)