CCP Investments to acquire Oaktree’s interest in Ports America

Canada Pension Plan Investment (CPP Investments) has announced that it has reached a definitive agreement to become the 100 per cent owner of Ports America, North America’s largest marine terminal operator.

This is being done through the acquisition of an interest from funds managed by Oaktree Capital Management. Ports America, which based in Jersey City, New Jersey, is the largest marine terminal operator in North America with operations in 70 locations and 33 ports across America.

CPP Investments yesterday made the announcement of its intention to take full control of Ports America, which is a leader in technology-driven solutions and covers a wide range of supply chain services including container, RoRo, break-bulk, military, and cruise ship operations.

The transaction is subject to satisfaction of certain closing conditions as well as regulatory requirements. The deal is expected to close by the fourth quarter of 2021.

CPP Investments has been an existing minority investor in Ports America since 2014 will continue to support the business with long-term capital and continuity of ownership, as the company deepens its focus on providing safe, secure and efficient service for all of its shipping line and beneficial cargo customers.

Take-over deal being strongly endorsed

Scott Lawrence, managing director and head of infrastructure at CPP Investments, points out that, Ports America represents the opportunity to continue to invest in a high-quality operator that plays an important role in global trade, “making the company a good fit for our long-term infrastructure investment strategy”.

According to Lawrence, “terminal operators play a crucial role as cargo demand and transportation requirements continue to grow in response to the rapid and dynamic changes in how individuals and businesses are buying and selling products”.

In concluding, he added that, “through further investment, Ports America can continue to meet these needs and we look forward to working with CEO Mark Montgomery and the management team to support the growth of the business in the upcoming years”.

For his part, Montgomery said that, “at Ports America, our commitment and ability to provide our customers with excellent, safe service and long-term strategic value, informs everything that we do”.

He added: “Our partners at Oaktree and CPP Investment have always shared that commitment and we look forward to continuing our work with the support of the CPP Investments team as they increase their ownership stake.”

Said Lawrence: “We share a long-term vision for Ports America and are excited to grow our capabilities and service offerings to position the company for another century of innovation, leadership and success.”

Emmett McCann, managing director and co-portfolio manager of Oaktree’s infrastructure investing strategy, commented that, “it has been a privilege to work alongside Mark and the entire Ports America team for the last 12 years and our conviction in the strength of the business has never been stronger. Ports America’s growth along with its track record of innovation and strong financial profile have positioned the company for success in today’s cargo management and terminal operations environment and we fully expect the business will only benefit from this new ownership structure”.

Since its founding in 1921, Ports America has driven a century’s worth of innovation in stevedoring, cargo handling, and best-in-class terminal operations. Today, Ports America is the largest terminal operator in North America, with diversified operations across the country, including 70 locations in 33 ports on each of the United States’ three coasts.

The company annually handles 13.4 million 20-foot equivalent units (TEUs), including 10 million tons of general cargo, 2.5 million vehicles and 1.7 million cruise ship passengers. Ports America employs a highly trained workforce with expertise in providing premium and flexible terminal operations and stevedoring services across these categories.

CPP Investments is a professional investment management organisation that manages the Fund in the best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income.

Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At June 30, 2021, the Fund totalled C$519.6 billion.