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407 ETR is a 108 kilometre toll highway which runs across the Greater Toronto Area north of the City of Toronto. The highway has 193 entry and exit points, 40 interchanges and over 300,000 drivers use it on an average weekday. In 1999, the Province of Ontario sold the highway to the private sector for $3.1 billion (plus $900 million of future construction and working capital requirements) making it the largest toll road privatization in the world.
Macquarie has advised equity investors on several transactions relating to 407 ETR.
Macquarie’s roles have included:
| Year |
Role |
| 1998/99 |
Advising a consortium on the acquisition of the highway from the Province of Ontario. The consortium included the Infrastructure Trust of Australia (predecessor to the Macquarie Infrastructure Group (MIG)) among other international and Canadian institutions and pension funds. Macquarie’s role included valuation, due diligence, negotiating the construction contract for 39km of tolled highway and managing independent advisors. Although the bid was not successful, Macquarie arranged $3.5 billion of committed capital. |
| 2001 |
Advising MIG on the $1.2 billion acquisition of 40% of Cintra Concesiones de Infraestructuras de Transporte S.A. (Cintra), the largest single shareholder of 407 International Inc. which owns 407 ETR. Macquarie North America performed the valuation and due diligence, managed external technical advisors and assisted with negotiations. In addition, Macquarie Bank Limited co-led the underwriting of $A1.7 billion of equity to fund the acquisition.
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| 2002 |
Advising MIG on the $493 million acquisition of a 16% interest in 407 International Inc. Macquarie North America’s role ranged from deal origination, to valuation, due diligence, negotiation, managing advisors and documentation. Macquarie Bank Limited also co-lead the underwriting of $A1.0 billion of equity to fund the purchase, including a $A200 million placement to Ontario Teachers’ Pension Plan Board.
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| 2002 |
Advising Cintra on the acquisition of 5.8% of 407 International Inc. from another shareholder, for $178 million. Macquarie North America's role ranged from deal origination, to valuation, due diligence, negotiations, managing advisors and documentation.
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As a result of these transactions, MIG is now the largest individual shareholder (direct and indirect) in 407 ETR.
In each transaction, Macquarie was able to draw upon resources from its global network of offices and its vast international toll road and project finance expertise.
For more information on 407 ETR see our asset description or visit these websites: Macquarie Infrastructure Group and 407 ETR.
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