By Brian Dunn
The sale of Montreal Gateway Terminals (MGT) to a group of local investors is a vote of confidence for the company, according to its CEO, Michael Fratianni. A consortium led by independent portfolio management firm Fiera Axium Infrastructure Inc., along with Desjardins Group, Manulife, Fonds de solidarité FTQ and Industrial Alliance, paid a reported $650 million, an amount Mr. Fratianni would not confirm, to acquire MGT from Morgan Stanley Infrastructure Partners.
Fiera Axium manages funds with more than $1.2 billion in assets under management. It invests primarily in wind farms and hydroelectric projects in Canada and the U.S. Fiera Axium is jointly controlled by Fiera Capital Corporation with approximately $82 billion in assets under management and Axium Infrastructure Management.
MGT is the largest terminal operator in Montreal, handling 800,000 TEU’s in 2014, accounting for 58 per cent of all containers handled at the port through its Racine and Cast terminals, according to Mr. Fratianni.
“Morgan Stanley was a great investment partner and we were very happy with their involvement. But it is a closed end fund and after a certain period of time, they turn the investment over. The new owners have a much longer term outlook and they have an appreciation of the resiliency of the business. They also have a lot of trust in the staff and management.”
There is also added value being owned by local players who want to see the business and the region expand. They also want to invest in technology which differentiates MGT from the rest of the pack, said Mr. Fratianni. “With our new investment partners, we are confident that MGT will continue to raise the bar of reliability and consistent service to our customers who depend on a predictable supply chain. “We’re operating at about 60 per cent capacity, therefore we have more capacity to grow. We can put more containers through by making certain operational adjustments and adding more equipment. And we have capital expenditure plans to accommodate future growth.”
“This investment fits well within our core infrastructure strategy as Montreal Gateway Terminals represents an essential infrastructure asset, agreed Stéphane Mailhot, President and CEO of Fiera Axium. “Our consortium is comprised of partners with a long-term investment horizon and vested interests in the economic development of Greater Montreal, Quebec and Canada.”
MGT is coming off a strong year with growth up five per cent over 2013, according to Mr. Fratianni, and he sees similar growth in 2015. He expects the new Canest Transit grain handling terminal in the former Elevator No. 3 will result in an additional 4,000 to 5,000 containers a year alone. “I’m very optimistic. The lower Canadian dollar will make Montreal more attractive. If you look at the volume handled by the Port of Montreal, there is diversification, a significant amount coming in from Asia and the Middle East.
“There is a lot of optimism among the shipping lines as well. Montreal is a great place to have cargo come through with its very fluid movement. Montreal doesn’t expect to be one of the biggest ports, but it is one of the most efficient. “