North American Container Terminal Acquisition
Client: Private Equity Investor
Parsons Brinckerhoff Role: Strategic Consulting, Due Diligence
The Ontario Teachers’ Pension Plan Fund (OTPP) has been focusing more on the growing attractiveness of various infrastructure assets, in particular, container terminals given increasing global trade on maritime shipping lanes. At the same time, it was seeking stable, inflation adjusted returns from long-lived assets that would better match its liabilities. Stable revenue growth, accompanied by high barriers to entry, makes infrastructure assets, like container terminals particularly attractive to investors.
In 2006, OTPP bid on the acquisition of four North American container terminals in New York, New Jersey and British Columbia from Orient Overseas International Limited (OOIL). OTPP retained Parsons Brinckerhoff as technical advisors to provide market, infrastructure, environmental, and financial feasibility assessments of the transaction. Parsons Brinckerhoff provided advice on the operational and capital investment aspects as well as marketplace drivers that determine the business’ operating cash flows. Parsons Brinckerhoff developed independent forecasts of these operating cash flows based on demand and throughput capacities, unit price, and operating and capital cost schedules for each facility. These forecasts were used to inform the client’s valuation model, which resulted in OTPP’s successful acquisition of the four terminals.
Project Finance magazine awarded this acquisition the “Overall Deal of the Year for North America,” as well as the “North American Acquisition Deal of the Year” for 2007, stating, “the $2.3 billion deal served as something of a trailblazer for its successors, pioneering a hybrid of project and leveraged financing that was replicated on later deals.”
Parsons Brinckerhoff, with its global presence and strong reputation in infrastructure, is well positioned to help clients evaluate the attractiveness of such investments. Parsons Brinckerhoff provided a thorough and comprehensive evaluation of technical, operational, regulatory, market and financial issues relevant for OTPP’s bid valuation.