BlackRock Agrees to Acquire Global Infrastructure Partners

In a joint press release issued Jan. 12, BlackRock Inc. and Global Infrastructure Partners (GIP) announced that they entered into an agreement for BlackRock to acquire GIP for total consideration of $3 billion of cash and approximately 12 million shares of BlackRock common stock.

A $1 trillion market today, infrastructure is forecast to be one of the fastest growing segments of private markets in the years ahead. A number of long-term structural trends support an acceleration in infrastructure investment.

These include increasing global demand for upgraded digital infrastructure like fiber broadband, cell towers and data centers; renewed investment in logistical hubs such as airports, railroads and shipping ports as supply chains are rewired; and a movement toward decarbonization and energy security in many parts of the world.

Further, large government deficits mean that the mobilization of capital through public-private partnerships will be critical for funding important infrastructure. Finally, as capital has become more scarce in a higher interest rate environment, companies are exploring partnership opportunities for their embedded infrastructure assets to improve their returns on invested capital or to raise capital to reinvest in their core businesses.

BlackRock has a broad network of global corporate relationships as a long-term investor in both their debt and equity. These relationships will help us lead critical investments in infrastructure to improve outcomes for communities around the globe and generate long-term investment benefits for clients.

The combination of GIP with BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities.

The over $150 billion combined business will seek to deliver clients market-leading, holistic infrastructure expertise across equity, debt and solutions at substantial scale. Marrying the proprietary origination and business improvement capabilities of GIP and BlackRock’s global corporate and sovereign relationships provides a platform for diversified, large-scale sourcing to support deal flow and co-investment opportunities for clients.

The firms believe that bringing GIP and BlackRock together will deliver to clients the benefits of broader origination and business improvement capabilities.

Founded in 2006, GIP, an independent infrastructure investor, manages more than $100 billion in client assets across infrastructure equity and debt, with a focus on energy, transport, water and waste, and digital sectors. GIP’s performance has been driven by proprietary origination, operational improvements, and timely exits. GIP has successfully scaled its global equity flagship series, with the most recent fully invested flagship fund in 2019 surpassing $22 billion.

BlackRock’s more than $50 billion of infrastructure client assets under management (AUM) is comprised of infrastructure equity, debt and solutions, and has grown both organically and inorganically since inception in 2011. Top investment talent at BlackRock lead franchises that include Diversified Infrastructure, Infra Debt, Infra Solutions, Climate Infrastructure and Decarbonization Partners.

The GIP management team, led by Bayo Ogunlesi and four of its founding partners, will lead the combined infrastructure platform. GIP’s founders and teams remain highly committed to clients, and the companies expect the integration with BlackRock’s broader platform will generate even greater opportunities.

Subject to completion of customary onboarding procedures, BlackRock has also agreed to appoint Ogunlesi, GIP founding partner, chairman and CEO, to the board at the next regularly scheduled board meeting following the closing of the transaction.

“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy. We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors. Policymakers are only just beginning to implement once-in-a-generation financial incentives for new infrastructure technologies and projects,” said Laurence D. Fink, BlackRock chairman and CEO.

Fink continues, “I’m delighted for the opportunity to welcome Bayo and the GIP team to BlackRock, and happy to announce our plans to have Bayo join our Board of Directors post-closing. We founded BlackRock 35 years ago based on a unique understanding of investment risk and the factors and forces driving investment returns. GIP’s deep understanding of the factors and forces driving operational efficiency for long-term value creation have made them a global leader in infrastructure investing. Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally, and we couldn’t be more excited about the opportunities ahead of us.”

“I’m excited about the power of this combination and the prospect of working with Larry and his talented team. We share with BlackRock a culture of collaboration, client focus, investment partnership, and commitment to excellence. Investors have adopted private infrastructure investing for its ability to provide stable cashflows, less correlated returns, and a hedge against inflation. Global corporates have turned to private infrastructure as a fast innovator and a more commercially agile owner of infrastructure assets that aren’t core to their commercial businesses. This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through long-standing firm relationships,” said Ogunlesi. “We are convinced that together we can create the world’s premier infrastructure investment firm.”

GIP Profile

GIP is the largest independent infrastructure manager by AUM globally, with more than $100 billion in AUM across infrastructure equity and credit strategies supported by approximately 400 employees. Its portfolio companies generate more than $75 billion in annual revenue and employ approximately 115,000 people around the world.

Among GIP’s investments are Gatwick, Edinburgh, and Sydney airports, CyrusOne (data centers), Suez (water and waste), Pacific National and Italo (rail), Peel Ports and Port of Melbourne, and several major renewables platforms, including Clearway, Vena, Atlas and Eolian.

Click this link to read the full press release.

SOURCE – BlackRock Inc.