A company controlled by the Canada Pension Plan Investment Board has acquired a 10.01 per cent equity stake in the 407 International Inc.

The 407 International holds a concession over the 407 express toll route from SNC-Lavalin Group Inc. Under the terms of the agreement, the CPPIB agreed to pay $3 billion to SNC-Lavalin on closing, with an additional $250 million paid over 10 years. The terms are conditional on achieving certain financial performance targets related to the toll highway.

Read: Court clears path for SNC-Lavalin to close sale of stake in 407

The CPPIB has been an investor in 407 International since 2010, when it acquired a 40 per cent holding.

“CPPIB invests in global infrastructure assets that offer predictable, resilient income streams in attractive locations,” said Scott Lawrence, managing director of head of infrastructure at the CPPIB, in a press release. “Toll roads provide CPPIB the opportunity to benefit from urbanization trends and invest in assets that benefit from the growth of a region. The 407 ETR continues to be an attractive infrastructure investment for all these reasons and remains a good strategic fit with CPPIB’s portfolio and exceptionally long investment horizon.”

Upon completion of the transaction, the CPPIB will control a 50.01 per cent stake in 407 International.

Read: SNC-Lavalin cancels sale of 407 stake to OMERS

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required