Canada Pension Plan Investment Board is partnering with AustralianSuper and UniSuper to acquire 50 percent of Transurban Chesapeake, a toll-road business comprising express lanes in the Greater Washington Area of the U.S. CPPIB will hold a 15 percent interest with an initial investment of US$624 million. The deal is expected to close in the first half of 2021.
TORONTO, Dec. 16, 2020 /CNW/ – Canada Pension Plan Investment Board (CPP Investments) and its partners AustralianSuper and UniSuper, will acquire 50% of Transurban Chesapeake, a toll-road business comprising the 495, 95 and 395 Express Lanes located in the Greater Washington Area in the United States. CPP Investments will hold a 15% interest in Transurban Chesapeake with an initial investment of US$624 million, plus a potential earn-out payment to Transurban over the next five years of up to US$21 million. Transurban will retain a 50% stake in the business.
The Express Lanes are a connected network of dynamically tolled lanes on Interstate Highways 495, 95 and 395, key arterial roads in the Greater Washington Area. The 495 Express Lanes (22 kilometres) opened in 2012 and operate on a portion of the Capital Beltway. The 95 Express Lanes (50 kilometres) opened in 2014 and are reversible lanes on Interstate 95 in Northern Virginia. The 395 Express Lanes (13 kilometres) opened in 2019 and are reversible lanes operating on Interstate 395 in Northern Virginia.
“We are pleased to expand our longstanding partnership with Transurban into a new geography,” said Scott Lawrence, Managing Director and Head of Infrastructure, CPP Investments. “Transurban Chesapeake’s Express Lanes provide vital congestion-relief in one of the busiest regions in the U.S. and are a good fit with our global infrastructure portfolio. With 67 years remaining in the Express Lanes concessions, this investment will provide stable, long-term cash flows for the beneficiaries of the CPP Fund.”
In addition to the asset acquisition, the new investors in Transurban Chesapeake will have exclusive development rights to invest alongside Transurban on future brownfield and greenfield growth opportunities in the Commonwealth of Virginia, State of Maryland and Washington D.C., as well as enhancements to existing concessions.
Over the last decade, CPP Investments has invested alongside Transurban on three significant road projects in Sydney, Australia: WestConnex, WestlinkM7 and the recently opened NorthConnex tunnel.
The transaction is expected to close in the first half of calendar-year 2021, subject to customary closing conditions and relevant consents and approvals.
CPP Investments is a long-term investor in the U.S. with investments in a wide range of assets across the country. At September 30, 2020, CPP Investments had C$155.8 billion invested in the U.S. across asset classes such as real estate, infrastructure, public equities and other direct investments.
About Canada Pension Plan Investment Board Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interests of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At September 30, 2020, the Fund totalled $456.7 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.