AXA funds first deal from third infra fund

AXA Private Equity has agreed to buy 10% of Spanish oil storage and transportation company CLH.

France’s AXA Private Equity (AXA PE) has agreed to buy a 10 percent stake in Spanish oil storage and transportation firm Compania Logistica de Hidrocarburos (CLH), “the first seed investment of AXA’s latest infrastructure fund,” the firm said in a statement.
CLH manages a network of more than 4,000 kilometres of oil pipelines and 37 storage facilities, billing itself on its website as “the leading company on the Spanish market for the transportation and storage of oil products”. It has an enterprise value of €3.6 billion, AXA PE said. Once the deal is closed, AXA PE will become one of the firm’s largest shareholders. The single largest shareholder in CLH is Spanish oil group CEPSA, with 14.1 percent.
While AXA PE declined to comment on the fundraising for its third infrastructure fund, a source familiar with it said the firm has managed to raise some €200 million for its latest vehicle. Several limited partners (LPs) are currently doing due diligence on the fund, which should allow AXA to reach €600 million of commitments soon, the source added. AXA, which started fundraising for its third infrastructure fund in the summer of 2010, is targeting a final close of €1.5 billion by the end of 2011.
The firm’s acquisition of CLH is its second Spanish deal after it bought a 50 percent stake in a highway last July from toll road operator Cintra. Mathias Burghardt, AXA PE’s head of infrastructure, commented that “CLH has a low level of financial leverage and is well placed to benefit from an eventual economic recovery in Spain”.
AXA PE also benefitted from seller DISA’s eagerness to divest its stake in CLH quickly. DISA, the fifth-largest service-station operator in Spain, wanted to exit CLH fast so it could use the proceeds to take advantage of a capital increase at Spanish construction firm Sacyr Vallehermoso, which closed last week, a source close to the deal said. DISA announced late last week that it had acquired 9.9 percent of Sacyr.
According to the source, some of the pension funds that are shareholders in CLH – such as Canada’s Public Sector Pension Investment Fund and the Netherlands’ Stichting Pensioenfonds Zorg en Welzijn – outbid AXA PE by as much as 5 percent. But the latter's ability to close the deal faster than the pensions was crucial for DISA to be able to buy its stake in Sacyr, the source explained.
Santander acted as financial advisor to AXA PE with Clifford Chance providing legal advice on the deal, AXA PE said.
In addition to the third fund it is raising, AXA PE has two other infrastructure funds. The first was a €200 million vehicle formed specifically so that it could acquire a stake in SANEF, the French motorway operator. Its second fund closed on €1.1 billion. Like its two predecessors, Fund III is also expected to focus on investments across France, Italy, Germany and the UK.