A ferry company that operates between Southampton and the Isle of Wight has been bought by Infracapital Partners LP, an infrastructure fund of financial services group Prudential.
A ferry company that operates between Southampton and the Isle of Wight has been bought by Infracapital Partners LP, an infrastructure fund of financial services group Prudential.
Infracapital Partners bought Red Funnel for an undisclosed sum after securing debt provided by HSBC.
Red Funnel’s existing senior management team remains unchanged and will continue to hold a significant equity stake in the business.
Managing director Tom Docherty said the board consider Infracapital’s long-term intentions for the business to be highly compatible with management’s plans for the future. “We look forward to working with the team at Infracapital in delivering our exciting plans for the future and for ensuring that Red Funnel is viewed as the first choice for cross-Solent travel.”
Infracapital manager Ed Clarke added that Red Funnel is a valuable strategic addition to its portfolio. “As long term investors we are attracted to Red Funnel’s established high quality business, growth potential and strong management.
“Given the essential nature of the infrastructure owned and operated by Red Funnel, the continuing provision of a reliable high quality service to commuters and other ferry passengers between Southampton and the Isle of Wight is central to our long term vision,” he added.
Red Funnel was advised on the deal by its auditor, Grant Thornton, which was led by partner Simon Davies and senior manager Paul Stout with tax issues handled by partner David Tipple.
Davies said the firm also advised management and private vendors on their tax position. “The timescale was very tight and we had to finalise the sales process against a backdrop of agreeing the best management terms possible in the transaction.
“This is a careful balance as clearly the institutional shareholders were looking to maximise consideration, which is not the best scenario in which to maximise the terms for management in newco,” he added. “Following selection of the preferred bidder, we were able to improve the outline terms negotiated to date, to a strong overall package for management. This was essentially concluded within 24 hours of the preferred purchaser being chosen, with the deal itself completed within six days of that selection.”
Sean Kelly of Lamport Bassitt provided legal services to Red Funnel’s management.
Kelly said he was pleased to work with the management team once again. “The transaction was challenging, both in terms of the very fast turnaround time, and the sale to an infrastructure fund, which introduced a number of technical challenges beyond the usual private equity issues.
“Over the past three years Lamport Bassitt has been involved in a number of the major deals in the area and are looking forward to continuing this success in the future,” he added.
Infracapital was established to make investments in cash-generative infrastructure assets, including electricity and gas transmission and distribution networks, renewable energy, water/sewerage companies and transport infrastructure.
Lamport Bassitt is a pragmatic and progressive full-service law firm. The firm has been established for over 125 years in Southampton and Reading. In all matters, for both businesses and individuals, the firm provides a highly professional service combining the core values of experience, speed and focus.
