VINCI Highways is acquiring US toll road Northwest Parkway (NWP) from DIF Capital Partners and Northleaf Capital Partners funds and HICL Infrastructure.
HICL said it has agreed to sell its entire equity interest in Denver’s Northwest Parkway (NWP) to VINCI Highways for a net consideration of $232m (€214.5m), adding that net proceeds represent a 30% premium to the company’s 30 September 2023 valuation.
In April last year, London-listed InfraRed Capital Partners-managed infrastructure fund HICL announced it was selling 30% of its stake in NWP for $86m and will retain a 23.3% equity interest in the toll-road project.
In a separate announcement, Northleaf said it had agreed to sell its 43.3% stake in NWP. Northleaf infrastructure funds initially acquired their NWP ownership interest in 2017 and subsequently increased their ownership stake in 2023.
DIF also said it has agreed to sell its 33.3% stake in NWP to the VINCI Concessions subsidiary, without disclosing any financial information. The road was acquired by DIF in 2017, via its DIF Infrastructure IV fund and co-investors, alongside consortium members.
The 14km toll road, constructed in 2003, is a part of the Colorado highway system, connecting E-470 at I-25 in the north metro Denver area with US 36 in Broomfield, Colorado. The concession contract lasts until 2106, representing the longest remaining term on the highway concession sector currently in the US.
VINCI Highways said the acquisition is its first traffic-risk concession in the US.
VINCI Highways also operates, as part of a public-private partnership, the Ohio River Bridges project, linking the states of Indiana and Kentucky, as well as free-flow toll service contracts – through its ViaPlus subsidiary – for governmental agencies in Texas and California.
Mike Bane, HICL chair, said: “HICL’s latest disposal yet again demonstrates the extent to which HICL’s high-quality portfolio continues to be undervalued by public markets. At a significant discount to NAV, HICL’s shares represent a particularly attractive investment and a highly accretive allocation of disposal proceeds.”
HICL expects to use up to £50m of the sale proceeds to fund a share buyback programme, with the remainder allocated to the drawn balance on the company’s £650m revolving credit facility, which is expected to be £135m drawn at 31 March 2024.
Edward Hunt, the head of core income funds at InfraRed said: “HICL has now successfully executed over £500m of disposals in the last 12 months, across a range of sectors and geographies, all at or above their respective carrying values.
“Alongside the buyback programme, this disposal reduces short‐term borrowings and creates additional flexibility for the company to selectively add attractive investment opportunities to the portfolio as they arise.”
Jamie Storrow, the head of infrastructure at Northleaf, said: “Northleaf’s successful exit from Northwest Parkway showcases the benefits of our infrastructure strategy and our focus on mid-market infrastructure assets with stable cashflow profiles, strong yield and inflation linkage.
”The ability to proactively source, prudently manage and opportunistically exit core infrastructure assets to deliver attractive returns for our investors is a hallmark of our investment approach.”
Andrew Freeman, partner and head of exits at DIF Capital Partners, said: “This successful exit represents a material transaction for DIF IV, after actively managing it through COVID times back to normality, generating strong yield and now realising attractive returns for our investors.”
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