Brookfield Nears Sale of TraPac Stake Valuing Terminal Operator at Approximately Two Billion Dollars

Brookfield Nears Sale of TraPac Stake Valuing Terminal Operator at $2 Billion

Advanced Talks Underway for Mitsui OSK Lines Acquisition

In a significant development in the global terminal operator market, Brookfield Asset Management Inc. is reportedly engaged in advanced talks to sell its 49% stake in TraPac LLC, a leading terminal operator with operations in key ports across North America.

According to sources familiar with the matter, Brookfield is seeking to exit its investment in TraPac, valuing the terminal operator at approximately $2 billion including debt. While the transaction is said to be progressing smoothly, there are concerns that it may still fall apart if negotiations hit a snag.

TraPac’s Valuation and Operations

TraPac, which has a presence in the ports of Los Angeles and Oakland as well as Jacksonville, Florida, has been valued at around $2 billion by Brookfield. This valuation takes into account TraPac’s debt obligations, indicating that the terminal operator is considered a highly valuable asset in the eyes of investors.

As a terminal operator, TraPac plays a critical role in facilitating the movement of goods and commodities through key ports across North America. The company has a long history, dating back to its founding in 1985 as a subsidiary of Mitsui OSK Lines (MOL). In 2014, Brookfield acquired a 49% stake in TraPac from MOL, marking one of the largest private equity investments in the terminal operator market at the time.

Brookfield’s Decision to Sell

The decision by Brookfield to sell its stake in TraPac comes as part of a broader trend in the terminal operator market. Existing investors have been actively seeking opportunities to acquire full ownership of port assets, with several notable deals having taken place in recent times.

In 2022, Blackstone Infrastructure Partners acquired controlling shareholders of marine-terminal operator Carrix Inc., while French shipping company CMA CGM SA agreed to purchase the majority owners of Fenix Marine Services. Additionally, the Canada Pension Plan Investment Board (CPPIB) has announced plans to acquire control of Ports America.

Market Implications and Future Outlook

The potential sale of Brookfield’s stake in TraPac has significant implications for the terminal operator market. The acquisition by Mitsui OSK Lines would further consolidate its position as a leading player in the sector, potentially giving it greater bargaining power in negotiations with shipping lines and other stakeholders.

Moreover, the deal may set a new benchmark for valuations in the terminal operator market, influencing the way investors approach deals in this space going forward. As such, the outcome of these advanced talks will be closely watched by industry observers and investors alike.

Key Players Involved

Brookfield Asset Management Inc.
Mitsui OSK Lines Ltd.
TraPac LLC
Blackstone Infrastructure Partners
CMA CGM SA
Canada Pension Plan Investment Board (CPPIB)

Table of Contents

Lessons from the Port of Vancouver’s Annus Horribilis

Why Every Canadian Should Care

The recent struggles faced by the Port of Vancouver serve as a stark reminder of the challenges facing terminal operators and port authorities across North America. From supply chain disruptions to environmental concerns, these issues have far-reaching implications for the global economy.

In this context, the potential sale of Brookfield’s stake in TraPac takes on added significance. The deal has the potential to shape the future of the terminal operator market, influencing the way investors approach deals and setting a new benchmark for valuations.

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As the talks between Brookfield and Mitsui OSK Lines continue, one thing is clear: the outcome will have significant implications for the terminal operator market. With the stakes high and the players involved among the biggest names in the industry, this deal is one to watch closely.

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