IFM seals €2.16bn deal for OHL Group concessions portfolio

IFM Investors has completed its acquisition of Spanish construction firm OHL Group’s concession business, adding 19 transportation assets to its portfolio for €2.16 billion.

The deal for full ownership of OHL Concesiones nets the Australian investor 14 toll roads, three ports, an airport and a light rail asset in Spain and across Latin America. While individual assets may have project-level debt, IFM invested only equity for the portfolio, Julio Garcia, the firm’s head of North American infrastructure, told Infrastructure Investor. The firm invested using its open-ended Global Infrastructure Fund.

Several of the assets are located in Spain, Chile, Colombia and Peru, which gives IFM its first exposure in these markets.

“We think these are attractive markets for us to have this kind of exposure,” Garcia said. “Many assets within this portfolio come with government return guarantees, which is also attractive for a core infrastructure investor. So, it provides us, in many instances, with more of a regulated type of exposure.”

Garcia said the portfolio consists mostly of operating assets but a few are under construction.

Part of the acquisition gives IFM indirect control over OHL Concesiones subsidiaries, OHL Mexico and Concesionaria Mexiquense (Conmex). Garcia said IFM, which owns a 49 percent direct stake in Conmex – it first invested in the company in April 2015 – is planning to sell that stake to Canadian pension CDPQ later this year.

IFM Investors, through its affiliate Magenta Infraestructura has launched a tender offer of OHL Mexico shares as required by the Mexican Securities Market Law, due to the indirect change of control in the company. OHL Mexico minority shareholders will have a chance to sell their stakes if they do not wish to continue with the new ownership.

“IFM Investors intends to implement enhanced compliance policies and procedures and will focus on improved governance and transparency with the company,” the Australian fund manager said in a statement. It will also announce a global rebranding strategy “at the appropriate time” to reflect the company’s new ownership, it added.

OHL Mexico has been beset by corruption allegations in recent years, culminating in 71.7 million pesos ($4 million, €3.2 million) fine by Mexico’s financial regulator in March 2016, which noted inadequacies in its financial reporting.

IFM’s Global Infrastructure Fund already manages transportation assets in the US, UK, Australia and Mexico. The firm has invested in the M6 toll road and Manchester Airports Group in the UK, the Indiana Toll Road in the US and five airports in Australia.