Tag: drag along clause

Criteria to Make a Decision Regarding the Remaining 49% Stake in Saba on 24 May

23 May 2018 – Expansión 

Tomorrow (Thursday 24 May), the Board of Directors of Criteria, the investment arm of La Caixa, will make a decision regarding the future of Saba, the parking lot group of which it is a controlling shareholder, with a 51% stake. Criteria must decide whether to purchase the remaining 49% share capital currently in the hands of KKR, Torreal and ProA Capital or, by contrast, accept an offer for the purchase of 100% of the company chaired by Salvador Alemany.

According to sources close to the operation, Criteria’s position will be to emerge as the buyer, once the economic estimate of the asset has been made known, whose valuation ranges between €1.2 billion and €1.4 billion.

The investment by La Caixa’s industrial holding company will put an end to the period of uncertainty that the company has been experiencing since Torreal (20%), KKR (18.5%) and ProA (10.5%) agreed to sell their combined 49% stake in a coordinated way more than a year ago. Saba’s minority shareholders have forced this outcome. According to the shareholders’ agreements, the drag-along clause was activated in May, which means that any of the shareholders may require the sale of 100% of the company. KKR, ProA and Torreal notified La Caixa of their intention to find a buyer. According to sources consulted, Criteria has expressed its willingness to buy at the estimated prices. Several funds have also expressed their interest in Saba. As Expansión revealed in November 2017, Arcus was one of the first funds to propose an agreement. In the market, sources also point to Macquarie, which purchased Empark last year.

For Criteria, which has declined to comment, the investment in Saba would represent its first major buy-side move since it sold 10% of Gas Natural Fenosa to the fund GIP in 2016 for around €1.8 billion and following its exit this month from Abertis, after accepting the joint takeover bid presented by ACS and Atlantia. For its 18% stake in the highway group, Criteria has received more than €3 billion, which it will use to fund new investments.

The conversations have accelerated in recent weeks to the point that Saba had to postpone its General Shareholders’ Meeting. Originally, it had been convened for 9 May, but it has been postponed until 12 June pending an agreement between the shareholders.

Original story: Expansión (by C.M., M.P.L. and A.Z.)

Translation: Carmel Drake

Criteria Negotiates with Torreal, ProA & KKR to Acquire 100% of Saba

9 April 2018 – Expansión

Criteria, the controlling shareholder of Saba, with a 51% stake, is holding advanced discussions with the minority shareholders of the parking lot group to become the sole shareholder of the company. The investment by La Caixa’s industrial holding company, which could take a decision within the next few weeks, would put an end to the current period of uncertainty that the company has been subject to since Torreal (20%), KKR (18.5%) and ProA (10.5%) agreed to sell their stakes (49%) in a coordinated way more than a year ago.

For Criteria, which declined to comment on the operation, the investment in Saba would represent its first major buy-side move since it sold 10% of Gas Natural-Fenosa to the fund GIP in 2016 for around €1.8 billion and ahead of its eventual exit this year from Abertis if the joint takeover bid by ACS and Atlantia proves successful. For its 18% share in the highway group, Criteria could receive more than €3 billion to use for new investments.

Saba’s valuation ranges in multiplies of between 12x and 14x its EBITDA, which amounted to €100 million in 2017. Taking this relationship as a reference, 100% of the parking lot group chaired by Salvador Alemany would be worth €1.4 billion, including the debt.

Saba’s minority shareholders have forced this outcome. According to the shareholders’ agreements, in May a drag along clause will be activated whereby any of the shareholders may force the sale of 100% of the company. KKR, ProA and Torreal notified La Caixa of their intention to look for a buyer. According to the sources consulted, Criteria has manifested its willingness to buy at the estimated prices.

For the funds, this is an acceptable solution – given the good relationship they have with the majority shareholder – which would also give continuity in terms of the management of the company. With 100% of Saba, Criteria could tackle the subsidiary’s growth strategy with greater freedom at a time when the parking lot sector is open to new corporate movements and company consolidation. Saba will hold its Annual General Shareholders Meeting on 9 May, which Criteria and the investment funds could use to materialise the operation with the configuration of a new Board of Directors if there is a change in the shareholding. The agenda for Saba’s meeting includes the appointment and ratification of directors.

Saba recorded turnover of €205 million in 2016, up by 7%. Its EBITDA, without taking into account the effect of divestments from its logistics parks, rose by 10% to €94 million, whilst its net profit remained at €4 million, which would have been €32 million if the aforementioned exceptional operation was taken into account. The firm’s net financial debt at the end of 2016 amounted to €357 million. Two-thirds of Saba’s business is generated in Spain.

Between 2011, when it broke away from Abertis, and 2016, the company led by Josep Martínez Vila invested €545 million to expand its business perimeter to include 195,000 spaces, although it also divested its logistics assets, with the aim of focusing purely on its parking lot activity. Following the operations of Aena, Adif and the Town Hall of Barcelona, the company has barely made any significant moves, despite expressing interest in its rivals such as Empark and Vincipark, amongst others.

Original story: Expansión (by C. Morán, M. Ponce de León & S. Saborit)

Translation: Carmel Drake

Empark’s Owners Engage JP Morgan To Sell The Giant For €850M

19 May 2017 – Expansión

Empark is back on the market. The Portuguese controlling shareholders of the car park company have engaged JP Morgan to find a buyer for an entity worth around €850 million, on the basis of the prices and valuations of other similar transactions in the sector. Empark is the leading car park company in Spain with 500,000 parking spaces in the Iberian Peninsula, the United Kingdom and Turkey. The firm’s gross operating profit (EBITDA) amounts to €65 million and its debt, which the company has been restructuring over the last year, amounts to €475 million.

Following the most recent changes, Empark’s shareholder structure is still dominated by the Portuguese investors Silva & Silva, which own 78% of the company. The second largest shareholder is the Chinese conglomerate Haitong, with a 14% stake.

The company’s control vehicle is dominated by the founding families, who participate in the management of the group. The main executives of Empark are José Augusto Tavares, Pedro Mendes (Executive President) and Antonio Moura.

The last attempt to sell the company was made in 2015. Then, the company progressed to the stage of selecting a buyer, Vinci Park (Ardian), but the operation did not come to fruition. Vinci Park reported the breakdown in its negotiations to buy Empark in July of that year after finalising its due diligence work, which produced unsatisfactory findings. Ultimately, the company was concerned about Empark’s high exposure to town halls which, following the local elections held that year, were considering “re-municipalisation”.

Sources close to the fund Ardian say that they are not interested in the operation at the moment. The infrastructure investment giant put Indigo (formerly Vinci park) up for sale this year for around €3,000 million. The sale of Empark is quite complex, given that the shares of the car park company serve, in turn, to secure the shareholders’ personal loans.

According to sources close to the operation, the Portuguese shareholders have dragged the other shareholders into the sale and have been given until the beginning of October to find a buyer. They are keen to leverage the ‘drag along clause’ set out in the company’s shareholder agreements (which means that when a third party makes an offer to purchase the company by buying all of its share capital, then the shareholder that has the ‘drag along right’ may force the other shareholders to sell their stakes to the buyer).

Sources in the sector believe that if Pedro Mendes and his partners do not find an investor with a reasonable offer in time, Haitong may push ahead with the operation by itself or with one of Empark’s creditor banks. Deutsche Bank is one of the company’s latest lenders. The German bank manages the fund RREEF Infrastructure.

One of the possible candidates to analyse the purchase operation is the fund First State, which acquired España Parkia from the Nordic fund EQT and Mutua Madrileña in 2016 for just over €300 million. The US fund Alinda is also very active in Spain. It has made an offer to buy Isolux’s car park portfolio. Another candidate could be the Chinese firm Haitong

Original story: Expansión (by C. Morán)

Translation: Carmel Drake