A consortium led by Transurban has bagged the operator of Queensland's toll roads in a $7 billion deal which will see it take control a network of around 70 kilometers of toll road in Brisbane.
In a statement issued to the stock exchange yesterday, the company said a consortium involving itself, AustralianSuper and Abu Dhabi Investment Authority subsidiary Tarweed had reached an agreement with Queensland Investment Corporation (QIC) to buy Queensland Motorways for $7.057 billion.
The deal will see Transurban operate Queensland Motorway’s 70 kilometer network of toll road assets, which include the Go Between Bridge, CLEM7, Gateway, Gateway Extension, Logan motorways and Legacy Way, which is set to open next year.
The amount paid exceeded expectations of market watchers, who according to media reports anticipated a price tag of between $6 billion and $6.5 billion, and is more than double the price QIC paid when the former government transferred the asset in May 2011 to QIC’s investment arm.
Transurban has requested a trading halt and says it expects to release further details about the transaction today.
Company Chief Executive Officer Scott Charlton acknowledged that at 27 time 2013 earnings before interest, tax, depreciation and amortisation (EBITDA), the price tag looks large.
But he said the previous price paid by QIC to acquire the assets in 2011 was actually 28 times EBITDA, and added that the new assets will complement the Group’s existing networks in Sydney and Melbourne.
“Today’s acquisition represents the culmination of detailed analysis that began last year, and we are delighted with the outcome.” Charlton said.
QIC Chief Executive Officer said sale process had drawn strong interest and that the successful consortium had an impressive track record in terms of operating similar assets.
The sale, which has already been cleared by the Australian Competition and Consumer Commission, is not expected to impact toll prices as these are regulated by Brisbane City Council.