EQT makes $875m splash on LA port terminal

The acquisition is the fifth tie-up for the Swedish firm’s third fund which closed on €4bn earlier this year.

EQT Infrastructure has bought 90 percent of a terminal in the port of Los Angeles in a deal worth a total $875 million.

The Stockholm-based investor’s acquisition of Global Gateway South from French shipping firm CMA CGM represents a cash consideration of $817 million and was agreed in partnership with port operating company P5 Infrastructure.

The 292-acre terminal is one of the largest such facilities in North America and is expected to handle over one million containers in 2017 under its concession agreement lasting until 2043.

EQT affirmed its intention to turn Global Gateway South from a cost centre-based asset to a leading terminal in terms of capacity and efficiency. The value-add firm said this will require “significant capital investments” in construction equipment and technology.

“The acquisition of GGS fits perfectly with EQT Infrastructure's focused sector approach of targeting high-quality, well-located logistics assets with transformation potential,” said Lennart Blecher, head of real assets at EQT.

The deal is the fifth sealed by the €4 billion EQT Infrastructure III fund, although it is the first wrapped up since the vehicle’s close in February. Global Gateway South is a diversification of what was a largely digital-based portfolio until now, comprising US fibre-optic internet provider Lumos Networks, Danish B2B data communications business GlobalConnect and Dutch telecoms infrastructure and energy group Delta Comfort. EQT Infrastructure III also formed a joint venture with German energy services provider Getec Energie in December.

Subject to clearance from the US’s Committee on Foreign Investment, the transaction is expected to complete by the end of the year.