On Tuesday, the Canada Pension Plan Investment Board (CPP Investments), manager of C$541.5 billion (about $428 billion) in Canadian pension assets, together with the C$221.7 billion (about $180 billion) Ontario Teachers Pension Plan Board announced that they are increasing their holdings in Mexico-listed private infrastructure operator Impulsora del Desarrollo y el Empleo en América Latina (IDEAL).
Paying MXN$45.00 per share, Ontario Teachers’ will acquire an additional 8.4 percent interest in IDEAL, while CPP Investments will increase its stake by an additional 1.1 percent. Post-transaction, Ontario Teachers’ and CPP Investments will each own 24.8 percent of IDEAL’s outstanding shares. Deal closing is subject to certain conditions, including approval from Mexican antitrust authorities (Comisión Federal de Competencia).
IDEAL owns, finances and operates a portfolio of brownfield and greenfield toll road concessions, water treatment plants, multimodal transit terminals and Mexico’s largest electronic toll collection systems operator. IDEAL’s primary business is in the toll road sector where it operates a portfolio of roads strategically distributed to interconnect key urban centers, ports and production hubs across Mexico.
“We are excited to further deepen our longstanding investment relationship with IDEAL alongside CPP Investments and significantly increase our exposure to high-quality core infrastructure assets in Mexico,” said Stacey Purcell, Managing Director, Latin America of Ontario Teachers’ Infrastructure & Natural Resources group. “Over the past few years, we have seen firsthand that IDEAL is the premier infrastructure platform in Mexico and believe it is well-placed to continue delivering strong results and growth in the years to come.”
In November 2021, FIBRA IDEAL, the infrastructure investment trust managed by IDEAL, indicated plans for a follow-on public offering which may include both a primary and secondary component. FIBRA IDEAL was established in 2020 when Ontario Teachers’ and CPP Investments’ closed their first direct investment in IDEAL. The FIBRA IDEAL offering, which is anticipated for early 2022, is expected to precede Ontario Teachers’ and CPP Investments increased shareholding in IDEAL.
“Our ongoing investment in IDEAL continues to provide CPP Investments with access to a diversified portfolio of real assets with stable cash flows, while also providing the opportunity for future growth through development opportunities in Mexico’s infrastructure sector,” said Scott Lawrence, Managing Director, Head of Infrastructure, CPP Investments. “We look forward to the ongoing growth of this platform alongside our valued partners.”
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