IFM Investors (IFM), through its Global Infrastructure Fund (GIF), is to pay $5.725 billion for the entire equity of ITR Concession Company (ITRCC), the concessionaire and operator of the US' Indiana Toll Road.
The transaction is IFM's biggest overseas investment to date and the second North American toll road purchased through its open-ended trust. Its closing remains subject to regulatory approvals.
The deal follows the acquisition, alongside OHL Mexico, of a 24.99 percent stake in Organisacion de Proyectos de Infraestructura (OPI) in January. The organisation owns Concesionaria Mexiquense (Conmex), the company responsible for the operation of a 111 kilometre-long portion of Mexico City's tolled ring road with a remaining concession life of 37 years.
“ITR represents a rare opportunity to acquire a large, high-quality, US-denominated transportation asset, giving our investors direct linkage to US GDP and CPI. ITR is a core infrastructure asset with defensive characteristics, demonstrated by strong financial resilience during the recession, said Kyle Mangini, IFM's global head of infrastructure.
ITR is a 157-mile divided highway in the state of Indiana. The road, which spans northern Indiana from its border with Ohio to the Illinois state line near Chicago, feeds directly into two toll roads at the state lines – the Chicago Skyway in the west and the Ohio Turnpike in the east.
The road represents a critical transportation link between highways leading to major east coast cities and Indiana, the City of Chicago, and the western United States. ITR is also critical to the Midwest region, which accounts for over 20 percent of the US' national GDP.
Pursuant to the concession agreement, ITRCC is to operate and maintain the road with the exclusive right to collect toll revenues for the next 66 years. It also earns rental income from roadside travel plazas along ITR.
“IFM Investors views the Indiana Toll Road as an essential operating asset for its strategic geographical position, long concession duration and inflation and GDP-linked tolling regime [being] strategically important to the North American transportation network,” added Mangini.