EQT submits offer to buy GB Railfreight
18 Oct 2016
Groupe Eurotunnel has received a binding offer for GB Railfreight from EQT Infrastructure II.
Groupe Eurotunnel has received a binding offer for GB Railfreight from EQT Infrastructure II.
UK: Channel Tunnel concessionaire Groupe Eurotunnel announced on October 18 that it had received a binding and irrevocable offer for its UK rail freight operating subsidiary GB Railfreight from Swedish private equity investor EQT Infrastructure II.
The offer is to be presented to staff representative bodies for consultation. Groupe Eurotunnel said the sale of GBRf would provide additional liquidity to develop its core infrastructure and transport business, particularly the ElecLink electrical interconnector project.
GBRf was established in 1999 by GB Railways, which was acquired by FreightGroup in 2003. In 2010 FirstGroup sold GBRf to Groupe Eurotunnel’s freight operating subsidiary Europorte for £26·3m. Since then it has more than doubled its activities, with forecast revenues of £125m and improved profitability. Groupe Eurotunnel said the internal rate of return from 2010 to 2016 estimated at the time of the potential sale is just above 28%.
EQT Infrastructure II invests in medium-sized companies that have the prospect of ‘strong, reliable, protected cash flows and significant opportunities for value creation’. These include a 95% stake in Swedish operator Hector Rail.
‘I am convinced that EQT is the right owner to take GB Railfreight to the next level, given their strong focus on growth and sustainable long-term value creation’, said Groupe Eurotunnel Chairman & CEO Jacques Gounon. ‘GBRf has been a great success, proving that significant value can be generated in this sector. On the strength of its results, the group will continue to favour long-term investments and shareholder return.’
The French rail freight activities managed by Europorte are not included in the planned deal, and Groupe Eurotunnel said Europorte would remain ‘focused on its own development to deliver constantly improved customer service, with the goal of becoming the foremost private rail freight operator in France’.
