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Transurban has struck a deal to sell half of the toll-road operator's Chesapeake assets in the US for US$2.1 billion ($2.8 billion).
The previously announced deal is aimed at freeing up capital for Transurban to pursue further opportunities in the US. It's also aimed at shoring up the group's balance sheet in the face of disruptions to traffic volumes due to COVID-19.
The company revealed today that traffic volumes on its North American roads remains subdued, particularly on the Express Lanes assets.
Transurban's existing partners in Australia - AustralianSuper, Canada Pension Plan Investment Board (CPP Investments) and UniSuper will acquire a 50 per cent stake in the US assets and they have agreed to a potential earn-out of up to US$70 million ($93 million) for Transurban between FY24 and FY26.
Transurban Chesapeake comprises Transurban's assets in the greater Washington state area, including the 495 Express Lanes, 95 Express Lanes and 395 Express Lanes, as well as three projects in delivery and development. These are the Fredericksburg Extension, 495 Express Lanes Northern Extension and the Capital Beltway Accord.
The institutional investors are already partnered with Transurban by holding stakes in Transurban Queensland, which owns the Clem 7 tunnel, Gateway Motorway and Logan Motorway, and in Sydney's Eastern Distributor, the NorthWestern Roads Group and WestConnex.
The US deal provides the partners with exclusive development rights to invest alongside Transurban on future brownfield and greenfield growth opportunities in the Virginia, Maryland and Washington D.C. in the US.
"We are pleased to welcome our partners AustralianSuper, CPP Investments and UniSuper in Transurban Chesapeake and continue the excellent working relationship we have already established with each of them in our Australian markets," says Transurban CEO Scott Charlton.
"This transaction realises significant value for security holders while enabling accelerated growth in North America and Australia, where we see a number of opportunities starting to materialise.
"The Transurban Chesapeake partners are committed to growing alongside Transurban in North America and we look forward to pursuing new opportunities with their financial and strategic support."
The deal is expected to be finalised by the end of FY21.
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