London-based investment manager 3i Group has purchased a majority share of Smarte Carte, an airport equipment concessionaire, for an enterprise value of $385 million.
The deal marks 3i’s first infrastructure transaction in North America and comes seven months after the firm announced the launch of its US-based arm focusing on the region. 3i will own more than 90 percent of the company’s equity, making the acquisition off its balance sheet. Smarte Carte’s management, which held a 50.1 percent share, retains a share of less than 10 percent. Fortress Investment Group, a New York-based asset manager, sold its 49.9 percent stake.
Based in Minnesota, Smarte Carte is known for the airport luggage carts available at nearly all major US airports. The 50-year-old company also operates in Canada, Australia, New Zealand, Sweden, the UK and Singapore.
Rob Collins, the 3i managing partner leading the firm’s North America team, said 3i was attracted to Smarte Carte due to the company’s resilience through a number of shocks to the industry such as airlines charging baggage fees and the rising prominence of wheeled luggage.
“This company has not only survived, it has thrived through all of those issues over five decades of owning and providing essential services,” Collins told Infrastructure Investor. “We looked at that as the definition of infrastructure.”
“We see Smarte Carte as a core infrastructure asset with core-plus returns,” Collins added.
While Smarte Carte’s products are omnipresent in the US, where 80 percent of its revenue is derived, 3i sees potential growth for the company both domestically and internationally. The firm said it will appoint United Airlines chief operating officer Greg Hart to Smarte Carte’s board of directors.
The deal marks another move for 3i in the airport services space. In July 2016, the firm acquired a 50 percent stake in TCR, an airport ground support equipment lessor headquartered in Brussels, for €204 million.