TWO infrastructure investors have emerged as the leading bidders for Bass Strait and Tasmanian freight business Strait Link, put up for sale by Sydney’s Allegro Funds about four months ago.
The Australian Financial Review’s Street Talk column [11 December] reported that Sydney’s Igneo Infrastructure Partners (Igneo IP) and New York’s Morgan Stanley Infrastructure Partners (MSIP) have lodged binding bids, possibly with private equity investor Stonepeak, also of New York, as a third bidder.
Igneo IP is part of the First Sentier Group which holds $215 billion of global assets under management, and has its origins in 1988 when founded by the then State Bank of NSW before being sold in 2019 by the Commonwealth Bank of Australia to Japan’s Mitsubishi.
Igneo IP has invested in in high-quality, mature, mid-market infrastructure companies in renewables, digital infrastructure, waste management, water utilities, transportation and logistics sectors in Europe, the UK, Australia, New Zealand and North America, according to its website. Amongst several transport-related entities, Igneo owns Swedish ferry company Scandilines.
Curiously, MSIP, which also has substantial investments in the region, in mid-November placed StraitNZ, the Cook Strait freight and passenger business with a lot in common with Strait Link, on the market with an expected price of up to NZ$1 billion.
MSIP reportedly paid more than NZ$500 million in 2022 when it bought the business from Australia’s CPE Capital. CPE had purchased the-then Strait Shipping from the founding Barker family in 2016 and combined it with Freight Lines and Streamline Freight to bolster the business and extend its supply chain coverage.
Allegro’s expectation for Strait Link, the former Toll Shipping acquired as part of the acquisition of (now) Team Global Express in September 2021, is in the region of $500 million according to the Australian Financial Review.
Strait Link was separated as an entity by Allegro and earlier this year TGE sold its Tasmanian logistics interests into Strait Link in a move widely seen as ‘fattening’ the latter for sale.
The AFR says Allegro wants to close a deal by Christmas.