AXA lands first airport with €497m Luton deal

The French fund manager is the latest private equity group to snap up a UK airport.

Newly independent AXA Private Equity (AXA PE), the French fund manager, has clinched its maiden airport deal with the acquisition of the UK’s Luton Airport from Spain’s Abertis.

Together with Spanish airports authority AENA, which has a 51 percent stake in the acquiring consortium, AXA PE will pay an enterprise value of £433 million (€497 million; $658 million) for the airport, which handled just under 10 million passengers last year.

The acquisition price amounts to roughly 12 times Luton Airport’s 2012 earnings before interest, tax, depreciation and amortisation (EBITDA). That’s well below recent transactions in the airports sector – such as VINCI’s December 2012 acquisition of Portugal’s 10 airports – which have valued assets at around 16 times EBITDA.

“For us, this partnership with AENA and London Luton Airport will provide a platform for AXA PE in the air transport sector,” commented Mathias Burghardt, AXA PE’s head of infrastructure. Sources involved in the transaction had previously told Infrastructure Investor that if Luton Airport was completed successfully, the deal might prompt the two partners to look at further acquisitions together.

AENA was a minority shareholder (10 percent) in the original owner of Luton Airport, which allowed it to exercise pre-emption rights on Abertis' larger stake (90 percent).

Abertis is currently in the process of disposing of its airports business, having recently offloaded Belfast International and Stockholm Skavsta airports as well as terminal concessions for Orlando Sanford, in Florida, to ADC & HAS Airports. The latter is a subsidiary of the Ontario Municipal Employees Retirement System.

Following completion of the Luton Airport sale – which is still subject to authorisation from the relevant authorities – Abertis’ airport holdings will be limited to a stake in Mexico’s Grupo Aeroportuario del Pacifico and the concessionaire for Montego Bay Airport, in Jamaica. Abertis said both assets are up for sale.

AENA, the world’s largest airports operator handling some 200 million passengers a year, operates 69 airports across the globe. Luton Airport, in peak periods, interconnects with 14 of AENA’s 46 Spanish airports.

Luton Airport is AXA PE’s sixth acquisition out of its third infrastructure fund, which it closed this year on €1.45 billion, with a further €300 million earmarked for co-investments. Prior to the airport deal, the fund had invested a little over €700 million across five assets, although it eventually syndicated 50 percent of that amount to its co-investors.

Other private equity investors to have purchased UK airports include Global Infrastructure Partners (GIP), the Abu Dhabi Investment Authority and the California Public Employees’ Retirement System, which together own Gatwick airport. GIP also owns London’s City airport, while the Ontario Teachers’ Pension Plan and Victorian Funds Management have a 48.25 percent stake in Birmingham International Airport.