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Thu January 21 2021

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BAM targets expansion in PPP

23 Nov 20 Royal BAM Group is to sell a 50% stake in its PPP business to an existing partner with the aim of expanding the portfolio.

It has reached conditional agreement with Dutch pension fund service provider PGGM on the key terms for the extension of the current partnership between PGGM Infrastructure Fund and BAM PPP. The two had formed a joint venture, BAM PPP PGGM Infrastructure Coöperatie, in 2011 to target public-private partnerships (PPP).

PGGM Infrastructure Fund intends to pay approximately €130m (£116m) for the acquisition of 50% of the shares in BAM PPP, consisting of an initial consideration of circa €100m payable at completion of the transaction and the remainder upon BAM PPP achieving specific financial targets in the future.

Royal BAM Group CEO Ruud Joosten said: “I’m very happy with this important milestone, which will deliver accelerated growth that will benefit both shareholders. BAM PPP will continue to work closely with its BAM sister companies to offer our clients with the best whole-life solutions. The expertise and global networks of both organisations will also support the development of new investment opportunities.”

PGGM Infrastructure Fund intends to acquire a 50% interest in BAM PPP, which develops and manages PPP concessions. BAM said that the extended partnership is expected to generate significant potential to accelerate growth in existing European and new global markets by providing BAM PPP with a broader remit and greater flexibility to expand its portfolio. At the same time, BAM PPP will be continuing to serve clients through the lifetime of concessions.

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PGGM head of infrastructure Erik van de Brake said: “For PGGM this transaction is a natural next step in a long-term successful partnership, aligning PGGM’s ambitions to invest and to build capacity within the PPP sector more globally and BAM’s interest in utilising its team’s market leading capability to its full potential.”

BAM PPP managing director Kieron Meade said: “Creating an exclusive investor and delivery partner joint venture was a significant innovation for the PPP sector in 2011. Since then, the BAM PPP PGGM full-service capability and proven commitment to long-term investment for the whole life cycle of a concession has proved extremely attractive to European clients. We believe this new collaboration will now help us unlock major opportunities in the new wave of PPPs emerging in selected global markets.”

On 30th June 2020, as a first step in further extending the partnership, PGGM Infrastructure Fund increased its share in 21 projects within BAM PPP PGGM Infrastructure Coöperatie from 80% to 90%, representing an investment of €39m.

The transaction is expected to close in December 2020. From January 2021, as a result of completion of the transaction, BAM PPP will operate as a company owned equally by Royal BAM Group and PGGM Infrastructure Fund.

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