Monday, September 30, 2024

KKR lands first airport deal with Queensland Airports stake

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KKR has partnered with Skip Capital, the family office of Australian billionaire couple Scott Farquhar and Kim Jackson, to acquire a 74.25 percent stake in Queensland Airports Limited.

Infrastructure Investor understands the deal has an enterprise value of approximately A$3 billion ($2.1 billion; €1.9 billion).

KKR will make the investment from its Asia Pacific Infrastructure Investors II, a fund that closed on $6.4 billion in early 2024 to make it the largest pan-Asia infrastructure fund raised to date. The deal represents the first time that KKR has invested in an airport asset through any of its infrastructure funds globally.

Skip Capital will make its investment from its Skip Essential Infrastructure Fund, a vehicle focused on investing in real asset-backed businesses in the climate, data, waste, water, transport and health sectors.

It has previously invested in data centre owner and operator Stack Infrastructure Australia, distributed renewable energy firm Energy Bay, care homes operator Group Homes Australia and energy networks business Spark Infrastructure, the latter alongside KKR.

The firm declined to disclose the size of SEIF and both KKR and Skip Capital declined to comment on other deal specifics, including value or the equity split between the two parties.

While the equity split was not disclosed, a source familiar with the deal told Infrastructure Investor that KKR held the largest stake but was capped at owning 49 percent of the asset due to foreign ownership rules.

QAL is the holding company for a portfolio of four regional airports in the Australian state of Queensland – Gold Coast, Townsville, Longreach and Mount Isa – that together service 39 domestic and six international routes.

The consortium is acquiring the stake from The Infrastructure Fund, the ex-Hastings Funds Management vehicle now managed by Macquarie Asset Management, as well as State Super and Australian Retirement Trust. TIF has been hit by investor redemption requests in the last year or two, including from ART.

In a statement, KKR managing director and head of Australia and New Zealand investments Andrew Jennings said: “Our investment in Queensland Airports is a unique opportunity to acquire a high-quality asset that provides critical services in a resilient market with strong macro tailwinds. Queensland Airports plays an important role in connecting Queensland communities to the rest of Australia and beyond.”

The deal is expected to reach financial close in late 2024, subject to regulatory approvals.

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