ACS negotiates with large funds to create its highway investment giant | Companies

The group ACS plans to create the largest investment vehicle in infrastructure concessions in the world, focused on the construction and management of toll roads, in collaboration with one or more specialized funds.

The company, according to sources familiar with the initiative, has opened contacts with some of the largest infrastructure investment entities. A movement that involves activating the alternative plan to the acquisition of Austostrade per l’Italia (ASPI).

Florentino Pérez already announced in May, during the ACS shareholders meeting, that he was handling different scenarios if the desired purchase of the Italian concessions of Atlantia did not bear fruit. ASPI has gone into the hands of a consortium with a majority of the Italian State (Cassa Depositi e Prestiti has control and the Macquarie and Blakstone funds share a minority stake), before which ACS has set the course towards the constitution of a platform that would start with the assets of the group’s concessionaire, Iridium, and with its 50% stake in Abertis.

The ACS group activates the alternative plan to the frustrated acquisition of Autostrade

The sources consulted comment that, for the moment, the entry of Atlantia in the powerful investment vehicle with its half in the same Abertis. Previously, the Spanish conglomerate did make explicit in its approach to ASPI that its intention was to integrate the latter with Abertis under the same umbrella.

The future highway company will not only start with assets that make it a world reference, but will also have the ammunition to undertake a notable growth project. ACS expects to close the divestment of its Industrial Services activity by year-end, raising 5,000 million euros in cash under the agreement signed with Vinci. In addition to the notable capital gains derived from this operation, Pérez and his team seek to make the incoming cash profitable as soon as possible, and this would be possible with a focus on highways.

Both capital and asset contributions are expected from the investment funds to which the toll road platform is opened. The governance model and the stakes will depend on the final configuration of the shareholders.

In recent years, ACS has been intertwining capital and alliances with the largest players in different areas of activity. I buy Hochtief and Cimic in a single operation, taking the throne among the international work contractors; joined forces with Atlantia to buy Abertis, and the Italian took a relevant stake in Hochtief, and ACS is preparing to create a joint venture with Vinci to develop 25,000 MW renewable. Of the latter, which market analysts value at 1,000 million at the time of its launch, it will have 49%.

The subsidiary will include Iridium and Abertis, and will invest with the 5,000 million from the sale of Cobra

Once this path has been traced, the next milestone is the configuration of a base of operations in concessions. Much of his attention would be focused on the United States and the infrastructure plan committed by the president Joe biden. All without giving up the purchase of mature assets.

Of course, Florentino Pérez has stressed on different occasions that any ACS project requires preserving the investment grade.

Growth lever

ACS expectations for this year still pandemic go through increase net income by 30%, from 574 million in 2020. The expected figure is close to 750 million before the largest divestment in its history. The key lies in the restoration of mobility and, with it, the return to normality of Abertis and its 8,600 kilometers of toll roads.

The Catalan concessionaire saw its sales drop 24% in 2020, with never-before-seen traffic crashes. Its contribution to the result of ACS decreased by 280 million compared to 2019, causing a loss of 35 million. Despite the deep pothole, Abertis has won new concessions in Mexico (51% of RCO) and the US (55% of the Elisabeth River Crossing tunnels), and is in a position to continue growing.

Iridium, for its part, has a basket of highways that total 1,100 kilometers and almost 15,000 million of aggregate investment.

A market filled with giants

Toll specialists. The list of highway investment funds is almost endless. Common in large operations are Brookfield (partner of Abertis in Brazil), Macquarie, IFM, Meridiam, Ardian, Mirova, CPPIB (first shareholder of the Canadian highway 407ETR), the Swedish EQT, the Dutch APG (owner of the Portuguese Brisa) and PGGM (Globalvia shareholder together with OPTrust and USS), KKR, the Qatari fund QIA, the generalists Blackrock, Blackstone and TCI, among many others.

Focus. The president of ACS, Florentino Pérez, highlighted in the last shareholders meeting that “the sale of ACS Industrial allows us to materialize the value created during these years and focus our Group towards a sustainable construction and concessions platform, with a capacity to generate profit recurring and consolidated leadership in developed markets ”.

Opportunities with work included. ACS has identified potential new construction (greenfield) projects for infrastructure concessions with a total planned investment volume of around 250,000 million euros in the US, Canada, Australia and Europe.


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