2007

KKR Buys UN Ro-Ro: From Bridges to Sea Bridges

It started with municipalities raising cash by selling or leasing toll roads and bridges to private investors. Then it expanded into ports and terminals. And now, as private equity funds awash in cash seek to deploy dollars into global infrastructure and EBITDA multiples have expanded as equity returns have compressed, they are looking to the sea for investments.

Figures 1 and 2 tell the story. Ro-Ro and Ro-Pax ferries that have key franchises on key routes are being viewed more like bridges than ships – especially in fully developed Europe. This week, the trend accumulated its largest data point ever when massive U.S. buyout firm and maritime newcomer Kohlberg Kravis & Roberts (KKR) announced that it is in the process of buying a controlling stake in UN Ro-Ro, a cooperative of Turkish transport companies set up in 1993 when the war in Yugoslavia made over the road transport challenging.

As we understand the process, which is being running by Citigroup out of London, Ulusoy has agreed terms with KKR to sell its 87% stake for $1.2 billion and has the option, but not the obligation, to acquire the remaining 13% for the same price. To put this in context, UN Ro-Ro generated about $170 million of revenue in 2006 and has vessels said to be worth $800 million.

This is only an excerpt of Recent News – 09/06/2007

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