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Ontario Teachers' Strikes New Investment Partnership at Bristol and Birmingham Airports

Nov-2017 1:58 AM Ontario Teachers' Pension Plan: Ontario Teachers' Strikes New Investment Partnership at Bristol and 30-Oct-2017 Ontario Teachers' Strikes New Investment Partnership at Bristol and Birmingham Airports

Australia's TCorp and Sunsuper will acquire stakes from Ontario Teachers' in two of the UK's leading regional airports .

Altitude provided comprehensive vendor due diligence to support the sale incorporating traffic, commercial and technical components. Our work for each airport included:

  • Detailed review of the Bristol and Birmingham air traffic markets and analysis of key airline financial performance.

  • Analysis of historic financial performance including aeronautical revenue, non-aeronautical revenue, operating expenditure and EBITDA.

  • Identification of drivers of historical financial performance.

  • Detailed benchmarking of all aspects of revenues and operating costs against peer airport performance.

  • Detailed assessment of capacity for key processes and infrastructure requirements to meet the traffic forecasts.

  • Development of long term phased development plans to support the forecast traffic growth.

  • Development of long term traffic, aeronautical revenue, non-aeronautical revenue, operating expenditure, EBITDA and capital expenditure forecasts.

  • Production of comprehensive due diligence reports.

  • Meeting with bidders and responding to bidder queries.

Ontario Teachers' Pension Plan ("Ontario Teachers'"), and Australia's New South Wales Treasury

Corporation ("TCorp") and Sunsuper Superannuation Fund ("Sunsuper"), are announcing they will become investment partners in Bristol Airport and Birmingham Airport, two of the UK's leading regional airports.

Ontario Teachers' has entered a definitive agreement by which it will sell 30% of its stakes in both Bristol and Birmingham to TCorp as trustee of TCorpIM Direct Investment Fund E and Sunsuper Pty Limited as trustee of Sunsuper. TCorp and Sunsuper will each acquire 15% of Ontario Teachers' stakes in Bristol Airport and Birmingham Airport. Following completion, Ontario Teachers', TCorp and Sunsuper will own 70.0%, 15.0% and 15.0% of Bristol Airport and 33.8%, 7.2% and 7.2% of Birmingham Airport respectively.

Ontario Teachers' is Canada's largest single-profession pension plan. TCorp is the financial markets arm of the public sector in New South Wales, Australia, and Sunsuper is one of Australia's largest and fastest-growing superannuation funds.

"Working with like-minded partners who bring new ideas, capital and expertise to the table is core to our broader investment strategy," said Andrew Claerhout, Senior Managing Director, Infrastructure and Natural Resources at Ontario Teachers'. "We look forward to TCorp and Sunsuper joining us as shareholders, alongside the strong teams at Bristol and Birmingham and Ontario Teachers' enduring partnership with the District authority shareholders in Birmingham. Under the new shareholder structure we will continue to focus on creating long-term value for all stakeholders including the 19 million passengers who fly through these two airports every year."

Ontario Teachers' is the largest private investor in airports in Europe, with holdings in five freehold airports: Copenhagen Airports, Brussels Airport, Bristol Airport, Birmingham Airport and London City Airport. Ontario Teachers' has been an investor in Bristol and Birmingham Airports since 2001, increasing its stakes to 100% (Bristol) and 48.25% (Birmingham) in 2014 with the intention of bringing in new partners.

"In addition to the attractive investment characteristics of the individual airports, TCorp was particularly interested in this investment because of the opportunity to partner with Ontario Teachers' Pension Plan and Sunsuper, both experienced and like-minded global infrastructure investors," said Stewart Brentnall, TCorp Chief Investment Officer. "We are excited about working with our partners, not only on this investment but also on future opportunities. TCorp has a strategy of building long-term relationships with other sophisticated investors, which we believe will help to deliver value to our clients and members, both for managing existing investments and for identifying new investment opportunities."

"Sunsuper is an experienced investor in the Australian airport sector, and we are excited to expand our existing portfolio by adding stakes in two high-quality UK airports in Bristol and Birmingham," said Michael Weaver, Head of Private Markets at Sunsuper. "We believe that investments in the infrastructure sector provide greater scope for value creation through responsible stewardship, governance and proactive management of assets to create value for our members. We look forward to our ongoing involvement in the Bristol and Birmingham airports, with a key focus on delivering high-quality outcomes for all passengers and stakeholders."

Bristol Airport is the ninth largest airport in the UK with 7.5 million passengers in 2016, and Birmingham Airport is the seventh largest airport in the UK with 11.6 million passengers in 2016.

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