CANADA: Alberta Investment Management Corp has signed a definitive agreement to acquire a 100% equity stake in Cando Rail & Terminals Ltd from the rail freight group’s employees and private equity investor TorQuest.
Manitoba-based Cando was founded in 1978 and now operates more than 40 industrial railway yards, nine terminals that it owns and one short line, with more than 900 staff and over 100 locomotives.
In 2018 TorQuest partnered with the employee shareholders to recapitalise the company and support growth. Cando currently has more than 400 active employee shareholders who collectively own 25% of the business.
AIMCo operates at arms-length from the government of Alberta and invests globally on behalf of 32 pension, endowment and government funds in the province. Its global investments include a stake in UK rolling stock leasing company Porterbrook.
‘Cando is the type of platform investment that has become the hallmark of AIMCo’s infrastructure portfolio’, said Ben Hawkins, Head of Infrastructure, Renewables & Sustainable Investing at AIMCo, on July 21. ‘With this investment, our clients add one of Canada’s most successful rail platforms to their infrastructure portfolios.’
Subject to customary regulatory approvals the transaction is expected to close in late Q3 or Q4 2022. There will be no changes to operations or management.
Wells Fargo Securities served as lead financial adviser to Cando and TorQuest, and Northborne Partners also served as a financial adviser. Torys and MLT Aikins served as legal advisers. RBC Capital Markets served as an exclusive financial advisor to AIMCo, and Stikeman Elliott, Mayer Brown and Fletcher & Sippel served as legal advisers.
