Terra Firma nets 7.5x return on Tank und Rast sale

The sale of German motorway service area (MSA) firm Tank und Rast has delivered a higher return to the vendors than previously reported.

The deal, which was officially completed today, was worth €3.9 billion and delivered a cash-on-cash multiple of 7.5 times to sellers Terra Firma Capital Partners (Terra Firma) and Deutsche Asset & Wealth Management (Deutsche A&WM), a source close to the transaction said.

When the deal was announced early last month, the sale price was not disclosed but various media reports cited an estimated valuation of around €3.5 billion – in itself considerably more than prior expectations that between €2 billion and €3 billion would be paid.

The buying group 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 to RREEF Infrastructure – an infrastructure fund which is part of Deutsche A&WM – in 2007. The business has undergone a number of re-financings including, most recently, a €1.45 billion re-financing in December 2013.

Tank und 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.