www.Parctel.com: Leeds Bradford International Airport (LBIA) has been sold to European private equity firm Bridgepoint in a transaction totalling £145.5 million following a decision by five West Yorkshire councils to sell 100% of the share capital in the airport.
Commenting on the successful acquisition of the airport, Sir Graham Hall, who will now become chairman of LBIA, said: “Work can now begin on taking our airport up a league in every sense. LBIA is a key asset for our region and we want to build on its recent success and consolidate its role as the dominant international airport serving Yorkshire and Humberside.”
Adrian Williams, a director at Bridgepoint added: “We have a clear vision for the future success of LBIA – a future which will deliver benefits for everyone who uses it. Our aim is that the new LBIA will be one of which the staff and the region will be justifiably proud.”
Under the Bridgepoint strategic plan for the airport, a £70 million capital expenditure plan will be implemented to provide additional terminal capacity to accommodate anticipated growing passenger volumes and to meet more immediate infrastructure requirements. Specifically, the plan is built around:
- investment in, and development of, the existing airside and landside infrastructure to enhance capacity
- development of the route network to increase number of destinations, frequency and to double passenger capacity to seven million by the year 2015
- further development of the LBIA’s commercial revenues in areas such as retail and food & drink.
Bridgepoint has invested in the airport sector in the past. In 1997, it became the largest private investor in Birmingham International Airport (BIA) as part of a financing programme to fund the ongoing development of the airport. It sold its stake in December 2001 and during this five year period international connections at BIA grew by 70%, traffic grew by 40% (reversing leakage to neighbouring airports) and capital expenditure reached almost £200 million.
Leeds and Bradford councils each owned 40% of the airport with the remainder split equally between Kirklees, Wakefield and Calderdale. Although the councils will have no financial stake in LBIA, they retain a ‘special share’ to protect the name of the airport and to ensure its continued operation as an international airport.
The airport was formally advertised for sale in November 2006 in a process run by Ernst & Young, with legal advice prepared by DLA Piper. Bridgepoint was named preferred bidder on 4 April 2007.
Debt for the transaction was provided by Royal Bank of Scotland. Advisers to Bridgepoint in the transactions included: Rothschild (corporate finance), Addleshaw Goddard (legal), Ernst & Young Private Equity (transaction support and tax structuring), Airport Strategy & Marketing, Concession Planning International, Drivers Jonas, TPS Consult (commercial due diligence), ERM (environmental), Marsh (insurance).
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