Macquarie Bank has entered into an agreement with a group of investors led by Black Diamond Capital Management, to acquire 100 per cent of baggage cart business Smarte Carte Corporation for an enterprise value of US$270 million ($395.4 million).
Founded in 1970, Smarte Carte is the world's leading concessionaire of
baggage cart, locker and stroller services operating in airports, train stations, bus terminals, shopping centres and entertainment facilities around the world.
Baggage cart concessions represent the majority of Smarte Carte's operations.
Smarte Carte is the world's largest international airport baggage cart operator with concessions at 175 airports internationally -- the majority of which are situated in the United States -- and nine bus and train stations.
Smarte Carte also provides electronic locker services operating at approximately 500 locations in train stations, ski resorts, theme parks and entertainment facilities internationally and operates one of the largest stroller rental businesses in North America with operations at approximately 300 shopping malls.
Macquarie Bank's chief financial officer Greg Ward said that Smarte Carte was an attractive asset with a strong market position.
"Smarte Carte is a well established, geographically diversified business with high barriers to entry and stable cashflows," Mr Ward said.
"Historically, Smarte Carte has displayed very strong renewal rates for its concessions with a leading market share in the US over a long period.
"The business has also proven resilient to short term volatility in airport passenger traffic. "
Potential for further long term growth exists as Smarte Carte pursues additional airport concessions and other services in international markets, said Mr Ward.
Smarte Carte's senior management team will remain with the business following the acquisition.
Macquarie Bank will commit US$141.7 million for a 100 per cent equity stake in Smarte Carte.
The remainder of the purchase price will be debt funded.
Macquarie Bank will explore a range of options for Smarte Carte including its potential inclusion in a new Macquarie-managed fund.
The impact on Macquarie's tier 1 capital ratio during the holding period is anticipated to be a decrease of up to 0.9 per cent.
Financial close of the acquisition is expected to occur during the first quarter of 2006.
- AAP
