GIC among investors bidding for German group Tank & Rast in $4.11b deal

Tank & Rast operates off-motorway services. Image from website.

German motorway service station group Taoutnk & Rast (Tank & Rast), which has been up for grabs for three months now, has attracted several investor groups including Singapore’s GIC to bid in a deal worth up to 3.5 billion euros ($4.11 billion).

Reuters found out through sources that the investors were preparing to bid for the group, which British buyout group Terra Firma Capital Partners put up for sale in January this year.

Tank & Rast could appeal to pension funds and insurers who are focusing on infrastructure investments to generate better returns than from government bonds, the sources said.

A consortium of German insurers Allianz and Munich Re, sovereign wealth fund Abu Dhabi Investment Authority and Borealis, part of pension fund OMERS, aims to hand in an offer by next month’s deadline, the sources said.

Canadian pension funds PSP and Ontario Teachers as well as Singapore sovereign wealth fund GIC are working on a joint offer, while the infrastructure arm of Australia’s bank Macquarie is also expected to express interest.

Terra Firma, run by British financier Guy Hands, had asked Deutsche Bank and JP Morgan to explore options for the business, which operates 350 petrol stations and 390 service stations.

Tank & Rast holds 90% of German motorway concessions for petrol stations, shops, restaurants and hotels.

Terra Firma bought the group for 1.1 billion euros in 2004 before selling 50 per cent to Deutsche Asset & Wealth Management in 2007. Deutsche is also offering to sell and will not bid for the remaining stake, the news wires reported said.

In December, Bloomberg reported that Terra Firma was preparing to sell the highway rest-stop chain in 2015 in a deal worth $2.5 billion.

The business is expected to have core earnings of about 240 million euros in 2015 and the seller is hoping for a valuation of up to 15 times core earnings (EBITDA) in a deal potentially worth between 3 and 3.5 billion euros.

However, another Reuters source said such a price could make it tough for private equity buyers to extract value and could be better suited to longer-term infrastructure investors.

In 2013, Tank & Rast posted an EBITDA of 235 million euros on sales of 482 million euros. Listed peers like Italian Autogrill, France’s Sodexo and Elior as well as British Compass Group trade at an average of 9 times their expected earnings.

Some buyers are viewing the asset as a yield play due to its steady earnings flow and could expect to earn an internal rate of return (IRR) of 10 to 11 per cent by following its current business plan.

Other bidders are looking at everything from cashing in on Tank & Rast’s consumer data to raising the price charged to use its toilets. Such a strategy could yield an IRR in the mid-teens, the source said.

While the equity part of the investment may be more than 1.2 billion euros, bankers are working on debt packages of 2.1 billion euros, including 200 million in undrawn debt.

Also read:

GIC, Temasek to buy $468m worth of shares each in Swiss travel retailer Dufry

CVC & Singapore’s GIC team up for £2.5b bid for Center Parcs

GIC part of PGGM-led consortium in $3.2b LeasePlan deal: Report

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.