Terra Firma eyes UK ports business

UK-based mega-buyout firm Terra Firma may continue the diversification of its portfolio with a bid for PD Ports, the UK port operator owned by Babcock & Brown Infrastructure (BBI), according to a source familiar with the matter.

PD Ports: of interest to Guy Hands

Terra Firma is interested in PD Ports, the person said, and is keeping an eye on the ongoing sale process for the asset, which was confirmed earlier this year by BBI. BBI acquired the company in February 2006. Late last year, it sold a 30 percent stake in its other ports business, Euroports, which owns a portfolio of concessions in Europe and China.

Should Terra Firma submit a bid and be successful, it would be the first ports-related company in its portfolio, which recently expanded to include Australia’s second largest cattle ranch. The firm’s other infrastructure and related assets include UK landfill operator WRG – an $850 million acquisition made in 2003 – and pipeline, gas and water utility East Surrey Holdings, which it purchased in a €950 million deal in 2005.

Others reportedly interested in PD Ports include private equity firms HgCapital, CVC Capital, Carlyle and Star Capital.

Terra Firma is not party to any consortium of these or other investors interested in PD Ports.

The private equity firm founded by former Nomura investment banker Guy Hands has invested €11 billion since 1994, mostly in Europe.