BBGI in £36m Aussie prisons deal

Bilfinger Berger Global Infrastructure, which recently raised £212m on the London Stock Exchange, has added to its seed portfolio with the acquisition of the Victoria Prisons PFI/PPP. Following an earlier healthcare deal, the firm says the Australian element of its portfolio is now complete.

Bilfinger Berger Global Infrastructure (BBGI), the listed infrastructure fund of German developer Bilfinger Berger, has paid approximately £35.9 million (€43.1 million; $57.0 million) for 100 percent of Victoria Prisons, a PPP/PFI project, from Bilfinger Berger Project Investments (BBPI). The latter is Bilfinger Berger’s concessions division, which owns a 19.9 percent stake in BBGI.

Victoria Prisons comprises two prisons located near Melbourne, Australia. One is the 300-bed men’s high security Marngoneet Correctional Centre, which offers a treatment facility to promote rehabilitation, reduce repeat offending and prepare prisoners for life back in the community. The other is the 600-bed men’s maximum security Metropolitan Remand Centre.              

A statement from BBGI said Victoria Prisons would comprise 17.4 percent of its seed portfolio, and that the justice sector would make up 20.8 percent of the portfolio. Around two weeks ago, BBGI announced the £19.6 million acquisition of 100 percent of the Royal Women’s Hospital PPP, a specialist healthcare facility for newborns and women, also located in Melbourne. Frank Schramm, co-chief executive of BBGI, said Victoria Prisons “completes our portfolio in Australia”.

BBGI raised £212 million from a listing on the London Stock Exchange in December last year. It said it would buy up to 19 operational or near-operational assets from BBPI in the roads, education, healthcare, justice and other sectors. The assets would be based in the UK (41.4 percent), Canada (26.9 percent), Australia (26.9 percent) and Germany (4.8 percent).

BBGI is targeting an initial 5.5 percent annualised dividend yield and a rate of return of between 7 percent and 8 percent over the long term. It is managed by transferred staff from Bilfinger Berger with experience in PPP management.