Although no value was given for the deal struck by PSP Investments with existing majority owner Arcus for its 62.6 per cent stake in the business, it is likely to run into hundreds of million pounds.
PSP already holds a stake in the Leith-headquartered firm which infrastructure investor Arcus first bought into in 2008 before taking the business private in 2011.
Patrick Samson, head of infrastructure investments at PSP, yesterday described the deal as a “landmark transaction for PSP to increase our stake in a strategically located, top-tier infrastructure asset in the UK”.
“Since PSP’s original investment seven years ago, Forth Ports’ world-class management team has led the company through consistent high performance and growth. We are now entering the next phase of our journey together.”
Forth Ports, which has more than 1,000 staff, owns and operates eight commercial ports in the UK including Dundee on the Firth of Tay and six on the Firth of Forth – Leith, Grangemouth, Rosyth, Methil, Burntisland and Kirkcaldy, as well as Tilbury on the Thames.
Tilbury is also the site of a major new port terminal, “Tilbury 2”, and £1 billion of investment is earmarked to double the volume available across the area.
Charles Hammond, group chief executive of Forth Ports, said the new investment from PSP ensures continuity for the business.
“Forth Ports is in a strong position with a clear vision for the future,” said Hammond, who also paid tribute to the role played by the Arcus team in growing the company.
“This is an exciting time as we continue to deliver our ambitious expansion and investment programme around the UK,” he added.
Forth Ports was bought off the stock market by Arcus – which at the time was its largest shareholder – in a £760 million deal. Including debt the deal placed an enterprise value of about £1bn on the business.
According to its latest accounts for the year to 31 December 2017, Forth Ports’ revenues were £214.8m, flat on the previous year. Pre-tax profits were 1 per cent higher at £68.8m. Dividends of £48.3m were paid to shareholders, up from £34m.
“The Arcus team have been a long-term shareholder in Forth Ports and we leave the business in an excellent position, with a strong platform for continued growth,” said Stuart Gray, partner at Arcus.
“We have enjoyed working in partnership with the management team, growing the business substantially during our period of ownership, and we will continue to monitor how the business evolves over the years with the new shareholding structure in place.”
After the deal completes, PSP said it “will partner with other long-term investors who are well aligned to support the future growth of Forth Ports”.
Ottawa-headquartered PSP is one of Canada’s largest pension investment managers and works on behalf of employers including the Royal Canadian Mounted Police.