Milbank, Tweed, Hadley & McCloy LLP advised the banks financing the acquisition by Luxembourg-based investment fund EQT Infrastructure III of Eagle Marine Services, the operator of the Global Gateway South (GGS) container terminal in the Port of Los Angeles, with an enterprise value of approximately $875 million.
EQT Infrastructure will acquire most of the equity in EMS from CMA CGM, the third-largest shipping line in the world and the largest on the Asia-US trade route. CMA CGM will retain a small ownership stake in GGS and has signed a long-term utilization contract with the terminal. The acquisition financing includes term loans contributing toward the purchase price, plus additional loans to fund working capital and future capital improvements in container handling equipment and advanced technology at the port facility.
EQT Infrastructure will partner with terminal operator P5 Infrastructure to transform GGS into a global leader in trade infrastructure. In terms of capacity, GGS is the third-largest terminal in the Ports of Los Angeles and Long Beach. Together, the ports form the largest gateway in North America for growing transpacific trade flows. The Port of Los Angeles handled 8.8 million TEUs of containers in 2016. The adjacent Ports of Los Angeles and Long Beach rank 10th in the world and first in the Americas in container volume, handling 72% of West Coast traffic and one-third of nationwide container port volume. The deepwater berths and giant cranes at the GGS terminal handle cargo for Ocean Alliance lines (including CMA-CGM, APL, China Cosco Shipping, Evergreen Line, and OOCL) among others.
The Milbank team was led by Global Project, Energy and Infrastructure Finance partner Allan Marks, with special counsel Jeff Cohen and associates Ryan Hart, James Parker Lee and Eusebius Luk. Also providing assistance on the transaction were: Environmental partner Matthew Ahrens; Tax special counsel Drew Batkin; Real Estate associate Raad Shawaf; Executive Compensation and Employee Benefits partner Joel Krasnow; and Technology and Outsourcing partner Nicholas Smith.
“We are pleased to have worked closely with a sophisticated group of lenders and with EQT to close the financing for this high-profile acquisition,” said Mr. Marks. “The success of the transaction will allow EQT Infrastructure to fully capitalize on Global Gateway South’s capabilities and to increase the capacity and efficiency of this world-class container terminal. With our work for clients investing here at the Port of Los Angeles and – in unrelated current transactions for different clients – in major landside improvements at Los Angeles International Airport, we are honored to be playing a critical role in mobilizing billions of dollars in private capital to modernize and expand trade infrastructure in Southern California on a global scale.”
The port transaction closed on December 1, 2017.
