Patron Capital, the London-based private equity and real estate investor, has arranged a £98m financing package for portfolio company Simon Storage Ltd (SSL), the UK liquid and gas storage business it acquired for £88m in December 2002.
As part of the transaction, Fortress Investment Group, the global alternative investment and asset management firm, has teamed up with Patron to provide additional equity to Simon Storage, the former division of port and logistics company Simon Group plc.
The £98m transaction sees Bank of Scotland Corporate Banking and Royal Bank of Scotland co-underwrite £61m of senior debt finance and working capital. £10m of mezzanine debt funding has been arranged by Investec Structured Finance and provided by Investec Bank.
“The initial deal to acquire Simon was financed through equity and a bridging loan,” sells Shane Law, vice president at Patron Capital. “This deal involves Patron selling 50 per cent of the equity in Simon Storage to Fortress as well as refinancing the bridging loan.”
The company owns and operates seven deep-water terminals with a total storage capacity of approximately 1m cubic metres, including over 500 tanks. Sites include: Humber, Teesside, Tyne, Cumbria and Shannon in Ireland. SSL has approximately 300 customers including virtually all the major oil and chemical groups in addition to a number of long term contracts to provide specialised facilities for its clients.
The financing package enables Simon Storage to make acquisitions both in its local market in the UK and beyond. “The deal provides Simon with capital for acquisitions in the UK and Continental Europe. We’re backing a market-leading company with a very good management team, stable cash flows and a good relationship with all the big oil companies.”
Fortress Investment Group is a global alternative investment and asset management firm with over $4.7bn in equity capital currently under management. Fortress was founded in 1998 by a group of senior professionals led by Wesley R. Edens, Fortress is headquartered in New York, with offices in London, Rome, Frankfurt and Geneva.
Patron Capital invests in property, property-related companies or companies with significant property assets throughout Europe. To date Patron has invested in properties and companies with assets over E2bn.