Private Equity Deals & Transactions

Terra Firma exits German motorway service firm

Tank & Rast has been sold by Terra Firma and RREEF Infrastructure to a group of four institutional investors.

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Tank & Rast, Germany’s largest owner and concessionaire of motorway service areas (MSAs), has been sold by London-based private equity firm Terra Firma Capital Partners and RREEF Infrastructure, an infrastructure fund which is part of Deutsche Asset and Wealth Management.

The buying consortium comprises: Allianz Capital Partners, the alternative investment manager for German insurance firm Allianz Group; Borealis Infrastructure, the infrastructure investment platform backed by Canadian pension Ontario Municipal Employee Retirement System (OMERS); Infinity Investments, a wholly owned subsidiary of the Abu Dhabi Investment Authority; and MEAG, the asset manager for German insurance firm Munich Re.

Terra Firma was reported to have paid around €1 billion for a majority stake in the business in 2004 before selling 50 percent of its interest for an undisclosed sum to RREEF in 2007. No price has been disclosed for the latest sale, but while media reports before the deal predicted a valuation of between €2 billion and €3 billion, the latest reports indicate that more than €3.5 billion has been paid.

Tank & Rast provides services to 500 million visitors a year through its network of around 390 MSAs, 350 petrol stations and 50 hotels, all located on the German highway network.

“Germany’s stable concession framework and strong economy make it an ideal destination to invest,” said Michael Rolland, chief investment officer at OMERS Private Markets, in a statement. He pointed out that the deal represented Borealis’ first investment in the country.

In 2005, Terra Firma launched a €500 million capital expenditure programme at Tank & Rast to finance the construction of new sites, refurbishment of older sites and the introduction of capex-driven strategic and consumer-focused initiatives.

The business has undergone a number of re-financings including, most recently, a €1.45 billion re-financing in December 2013.

“We are now looking forward to working with our new owners on further expansion and innovation across the network,” said Dr Karl-H. Rolfes, chief executive officer of Tank & Rast, in the statement. “We will continue investing in new and existing sites as well as launch new product initiatives and partnerships to the benefit of our customers.”