On Wednesday, Swedish private equity and real assets investor EQT announced that it plans to sell its 90 percent stake in Fenix Marine Services, to French shipping giant CMA CGM for an enterprise value of $2.3 billion. CMA is the third largest global shipping line and a member of the leading Transpacific shipping alliance.
Fenix Marine Services is one of the largest terminals in the Port of Los Angeles and provides container handling services to shipping lines. The company handles approximately 2.3 million TEUs (unit of cargo capacity) annually and employs more than 145 people. The terminal also benefits from a long-term concession agreement, through 2043.
Since acquiring Fenix Marine Services in December 2017 through its third infrastructure fund (EQT Infrastructure III), EQT has undertaken a series of initiatives to help position the platform for long-term success, including a management overhaul led by port executive Sean Pierce, bringing in a team with deep global terminal operating experience and advanced technological know-how. EQT Infrastructure also backed significant investments in new equipment and systems, including the largest cranes in North America. EQT also introduced an extensive yard reconfiguration that increased terminal capacity by 40 percent, improved productivity, reduced turnaround time for truckers, and improved safety.
EQT Infrastructure also supported the installation of automated gates and implementation of advanced inventory tracking systems, as well as the launch of innovative machine learning technology to optimize terminal operations. According to EQT, these efforts firmly established Fenix Marine Services as one of the leading digitized port operators in the world.
During its time in the EQT Infrastructure portfolio, Fenix converted its entire equipment fleet to renewable diesel, eliminating over ten million pounds of greenhouse gases to date, and is testing low-carbon hydrogen fuel cell technology with partners including Toyota.
“Our vision was always to deliver on operational excellence and to do things better than they have been done before,” said Fenix CEO and President Sean Pierce. “All employees at Fenix Marine Services, whether on the front line in Port of Los Angeles or at our back-office in Arizona, have been critical in delivering that vision. This transaction is a testament to the strength and fortitude of the team. We thank our partners at EQT for their unique, active support of the company throughout this journey”.
“Fenix Marine Services plays an integral role in the complex North American supply chain,” said Alex Darden, Partner and Head of EQT Infrastructure’s U.S. Advisory Team. “We have been proud to support its mission of operational excellence and capacity growth to best meet consumer needs both before and during a pandemic that has highlighted the importance of Port of Los Angeles as a critical trade gateway. It has been a pleasure to partner with Sean and the current management team, each of whom have done a fantastic job implementing our full potential plan, including an ambitious digitalization program and an industry-leading sustainability agenda. Today, Fenix Marine Services is one of the most efficient and environmentally friendly terminals in North America.”
CMA says it plans to accelerate Fenix Marine Services’ development in the coming years by building a new berth, continuing the terminal’s digital transformation, extending the container yard to increase capacity in a staged approach; and expanding its rail capacity to create one of the largest rail infrastructures in the U.S.
In a statement announcing the deal, EQT Infrastructure said the company “is confident that CMA is the right partner to continue this incredible progress, ensuring the terminal’s operational efficiency and fluidity to the benefit of the entire port community.”
