Morgan Stanley (NYSE:MS) has let the word out that its infrastructure-investing business has signed a sale of Montreal Gateway Terminals Partnership. It is reported that the Canadian Group, Fiera Axium Infrastructure Inc. has bought the same. It is to be noted that Montreal Gateway Terminals is regarded as the largest operator at the Port of Montreal and ranks second in container facility in Canada.
So far, Morgan Stanley (NYSE:MS) fund has not disclosed the sale value, however, people close to the matter hinted that the deal is worth $516 million (C$650) million. The buyers’ group consists of Manulife Financial Corp., Desjardins Group, Fonds de solidarité FTQ and Industrial Alliance Insurance and Financial Services Inc., as stated in the press release. The deal has been reached after several rounds of discussions over the last few months while it briefly hit a roadblock over the price issue.
Sources informed that the talks resumed after Montreal Gateway Terminals gained 10-year extension over its 25-year contract with the port. Still, the pricing of the deal stood impacted from the difficulties of other terminals. Fiera Axium paid 16-17 times multiple for Montreal Gateway Terminals before accounting taxes, interest, depreciation and amortization, which is lower than the deal stuck for Australia’s Newcastle Port last year.
Deal is attractive
Fiera Axium is primarily a portfolio management firm that partly holds stake in Fiera Capital Corp. and Axium Infrastructure Management. The Group is focused on investing into the energy, transportation assets in Canada, and the U.S. It belongs to a small infrastructure fund category, which is concentrated on assets that are small for Canada’s larger pension funds.
Morgan Stanley (NYSE:MS) Infrastructure Partners had preliminary acquired 80% stake in Montreal port terminals in 2007, which was later raised to 100% in 2013. The company manages nearly 57% of the container traffic at the Montreal Port. The deal throws light on the attractiveness of port facilities as a sustainable source of revenue generation.