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ISTANBUL—Kohlberg
Kravis Roberts & Co. agreed to buy shipping company UN
Ro-Ro Isletmeleri AS in a €910 million ($1.3 billion)
deal, the biggest private-equity acquisition of a
Turkish firm.
KKR
bought 97.6 percent of UN Ro-Ro, the owner of nine Ro-Ro
(Roll-On, Roll-Off) ships, so called because trucks can
roll on and off their decks, on expectations Turkish
trade with Europe will grow, according to an e-mailed
statement Tuesday from the New York-based buyout firm.
The
purchase, KKR’s first in Turkey, comes after the
nation’s economy grew an average 7 percent for the last
22 quarters.
Goldman
Sachs Group Inc. bought a stake in an airport management
company in December and Hutchison Whampoa Ltd. won an
auction for port facilities in May. Foreign direct
investment rose to almost $20 billion in 2006, double
the previous year.
“The
government has made efforts to improve the investment
environment by reducing the red tape and making huge
corporate tax cuts,” said Ozgur Altug, economist at
Raymond James Securities in
Istanbul.
“Turkey is a country that continues to negotiate its
membership with the European Union (EU) and it has a
population of almost 80 million people—that’s 80 million
potential customers” making it attractive to foreign
investors.
The
buyout is the latest international investment in
Turkey’s transport and freight industries. Goldman Sachs
bought a $225-million stake in TAV Havalimanlari Holding
AS, a Turkish airport operator, and Hutchison Whampoa
and Turkey’s Global Yatirim Holding AS bid $1.3 billion
to run a port in the west Turkish city of Izmir.
KKR
hopes “to find other investment opportunities” in
Turkey, KKR partner John Pfeffer said in the statement.
He did not immediately return calls to his office for
comment.
Turkish
exports have doubled in the past four years and reached
a record $100 billion in the 12 months through
September. EU countries account for about 60 percent of
that trade.
The
investments come as Turkey’s government has cut
inflation from 70 percent in early 2002 to 7.1 percent
in September, sold state assets and pursued membership
in the EU.
Private
equity firms from Bain Capital to KKR are expanding
outside the US and western Europe and into markets such
as central
Europe and Africa
as they increasingly compete for the same assets.
The
previous record for a private equity buyout in Turkey
was the acquisition by TPG Inc., David Bonderman’s
buyout firm, in February last year of a stake in Mey
Icki, the country’s biggest producer of spirits, a deal
worth about $810 million.
UN Ro-Ro
transports more than a third of the truck traffic
between Turkey and Europe, traveling from the Istanbul
ports of Pendik and Ambarli to Italy’s Trieste, the KKR
statement said.
UN Ro-Ro
and rivals including closely held Italian line Grimaldi
Group and Denmark’s DFDS A/S represent a “golden
opportunity” for investors because traffic jams on land
are prompting road haulage companies to move more goods
by sea, Steven Brooker, an analyst at Enskilda
Securities in
Copenhagen,
said by telephone.
“Ro-Ro
seems dull and old school but, nevertheless, it’s the
next segment where you will witness a boom,” Brooker
said.
---Bloomberg |
