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HICL, DIF hit the road in US with $498m acquisition

The pair have joined forces with Northleaf Capital in a landmark deal to buy the Northwest Parkway toll road in Colorado.

A consortium comprising HICL, DIF and Northleaf Capital Partners has agreed to acquire a toll road in Colorado from Portuguese operator Brisa for $498m million.

The trio’s members will each take a 33.3 percent stake in the project and contribute $166 million. The Northwest Parkway highway has 90 years remaining on its 99-year concession.

The transaction marks both HICL’s first deal in the US and DIF’s first transport investment in the country. Toronto-headquartered Northleaf, for its part, is already the owner of a variety of energy and transport assets in Canada, Australia, the US and the UK.

HICL said it will fund its share of the deal by drawing down its revolving credit facility, which it increased from £200 million ($252 million; €236.6 million) to £300 million this week. A consortium of six banks provided the new liquidity.

DIF will buy its share via DIF Infrastructure IV, a €1.15 billion vehicle. The deal is the second sealed by the fund this week after it announced the acquisition of an 85 percent stake in a 10MW solar rooftop portfolio in France on Tuesday.

The 14km project, which connects several toll and non-toll highways, reportedly recorded the eighth-largest increase in traffic numbers in 2015 out of 31 toll authorities in the US. Northwest Parkway increased traffic last year by 13 percent to 6.1 million.

“The project is consistent with [our] stated strategy and supports HICL's disciplined investment proposition, which is to produce long-term income for shareholders from a portfolio of infrastructure investments that is positioned at the lower end of the risk spectrum,” said HICL director Tony Roper. “With a 90-year concession life remaining and strong inflation-linkage, this asset is well-placed to deliver attractive returns.”

The deal is expected to close in the first half of next year.