GIP to trim Pacific National stake | New data centre deal | MMA Offshore rival in IPO prep

Good evening,

After mulling over a sale for seven months, Global Infrastructure Partners is ready to pull the trigger at Pacific National, the country’s largest privately owned rail freight business.

Street Talk understands GIP has mandated JPMorgan’s bankers to find a buyer keen for a slice of its 50 per cent stake in Pacific National, which is chaired by Catherine Livingstone and made $619 million earnings last financial year. The infrastructure giant is typically self-advised on deals but is breaking with tradition in hiring external bankers for Pacific National.

Sources said GIP is expected to run a two-part process. The firm’s Global Infrastructure Partners II, a circa $US8.25 billion fund raised in 2012 holds 20 per cent of Pacific National. This column flagged GIP’s deliberations on the stake last year, noting it would be a sell down and not a full exit.

The last financial year was a tough one for the business, as statutory EBITDA fell to $619 million, down from $697 million a year earlier.
The underwhelming results and the coal freight business may deter some suitors. But Pacific National is a sizeable asset with decent market share and is expected to be looked at by core-plus infrastructure funds and strategic buyers.

Read the full story tomorrow and more on the Street Talk page.

At Street Talk’s calculations, Guzman y Gomez will need to IPO at a price-to-earnings multiple of about 60-times for Barrenjoey clients to get their money back. This year, Collins Food, the operator of KFC in Australia, managed to trade on a PE multiple of 21-times.

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