EQT is entering the passenger ferry sector for the first time, having agreed to buy 100 percent of Molslijnen, the largest passenger ferry operator in Denmark, from a group of shareholders led by Polaris, a Danish private equity firm.
The investment, which EQT is making through its fifth fund, for which it is aiming to raise €12.5 billion, is understood to be valued at around €1 billion.
“Our view is that the company provides a very essential service in Denmark,” Daniel Pérez, a partner in EQT’s infrastructure team, told Infrastructure Investor. “In addition, it has proven to be very resilient in these past months.”
Headquartered in Aarhus, Molslinjen was established in 1963. When Polaris acquired it in 2016 for approximately DKr850 million ($138 million; €114 million), the company’s fleet comprised three high-speed ferries operating a single route, connecting Zealand, one of Denmark’s islands, with Jutland, a peninsula that borders with Germany.
Since then, the company has grown its fleet to 15 vessels, serving nine routes and eight million passengers per year.
EQT plans to continue this M&A strategy to grow the company and to further expand the number of routes it operates.
“There is room for expansion in Denmark, but we’ll also be looking to the other Nordic countries,” Pérez said.
He referred to the strategy EQT followed in building out a digital infrastructure platform in the Nordics with Global Connect, a fibre-based B2B and data centre provider in Denmark. The firm acquired the business through its third infrastructure fund in February 2017, which it has since merged with Norway-based Broadnet and IP-Only in Sweden.
“That gives an indication of the type of toolbox we can apply to Molslijnen, which is to build larger and more diversified groups through M&A,” Pérez said.
In addition to continuing a strategy of inorganic growth, EQT will also work on further decarbonizing the company’s fleet, building on the company’s achievement to date of reducing CO2 emissions per transported kilogram by more than 60 percent in the past decade.
“There’s been a material fleet modernisation programme, which we intend to continue to support,” Pérez said.
“We’ll be looking at electrifying the shorter routes and using alternative fuels for the large vessels where electrification is not realistic,” he explained. Potential alternative fuels include biogas, hydrogen and ammonia.
The objective will be to “future proof” the company and “create a long-term, sustainable business that we think will be more valuable,” Pérez said.
With this transaction, EQT Infrastructure V is expected to be 20-25 percent invested, according to a statement.
The other three investments the firm has announced to date through fund V include a co-investment alongside EQT Infrastructure IV in fibre group Deutsche Glasfaser; an investment in French nursing home operator Colisee; and a joint venture with Belgian digital services provider Proximus.